As filed with the Securities and Exchange Commission on April 22, 2022
Securities Act File No. 333-261775
File No. 814-01471
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 | ||
Pre-Effective Amendment No. | ☐ | |
Post-Effective Amendment No. 1 | ☒ |
Oaktree Strategic Credit Fund
(Exact Name of Registrant as Specified in Charter)
333 South Grand Avenue, 28th Floor
Los Angeles, CA 90071
(Address of Principal Executive Offices)
(213) 830-6300
(Registrants Telephone Number, including Area Code)
Mary Gallegly
Oaktree Strategic Credit Fund
333 South Grand Avenue, 28th Floor
Los Angeles, CA 90071
(213) 830-6300
(Name and Address of Agent for Service)
WITH COPIES TO:
William G. Farrar
Sullivan & Cromwell LLP
125 Broad Street
New York, NY 10004
(212) 558-4000
Approximate Date of Commencement of Proposed Public Offering: As soon as practicable after the effective date of this Registration Statement.
☐ | Check box if the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans. |
☒ | Check box if any securities being registered on this Form will be offered on a delayed or continuous basis in reliance on Rule 415 under the Securities Act of 1933 (Securities Act), other than securities offered in connection with a dividend reinvestment plan. |
☐ | Check box if this Form is a registration statement pursuant to General Instruction A.2 or a post-effective amendment thereto. |
☐ | Check box if this Form is a registration statement pursuant to General Instruction B or a post-effective amendment thereto that will become effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act. |
☐ | Check box if this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction B to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act. |
It is proposed that this filing will become effective (check appropriate box):
☐ | when declared effective pursuant to Section 8(c) of the Securities Act. |
If appropriate, check the following box:
☐ | This [post-effective] amendment designates a new effective date for a previously filed [post-effective amendment] [registration statement]. |
☐ | This Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: . |
☐ | This Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: . |
☒ | This Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, and the Securities Act registration statement number of the earlier effective registration statement for the same offering is: 333-261775. |
Check each box that appropriately characterizes the Registrant:
☐ | Registered Closed-End Fund (closed-end company that is registered under the Investment Company Act of 1940 (Investment Company Act)). |
☒ | Business Development Company (closed-end company that intends or has elected to be regulated as a business development company under the Investment Company Act). |
☐ | Interval Fund (Registered Closed-End Fund or a Business Development Company that makes periodic repurchase offers under Rule 23c-3 under the Investment Company Act). |
☐ | A.2 Qualified (qualified to register securities pursuant to General Instruction A.2 of this Form). |
☐ | Well-Known Seasoned Issuer (as defined by Rule 405 under the Securities Act). |
☒ | Emerging Growth Company (as defined by Rule 12b-2 under the Securities Exchange Act of 1934 (Exchange Act). |
☒ | If an Emerging Growth Company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of Securities Act. |
☒ | New Registrant (registered or regulated under the Investment Company Act for less than 12 calendar months preceding this filing). |
EXPLANATORY NOTE
This Post-Effective Amendment No. 1 to the Registration Statement on Form N-2 (No. 333-261775) of Oaktree Strategic Credit Fund (as amended, the Registration Statement) is filed pursuant to Rule 462(d) solely to add exhibits that have been revised from the versions previously filed with respect to such Registration Statement. Accordingly, this Post-Effective Amendment No. 1 consists only of a facing page, this explanatory note, and Part C of the Registration Statement on Form N-2 setting forth the exhibits to the Registration Statement. This Post-Effective Amendment No. 1 does not modify any other part of the Registration Statement. Pursuant to Rule 462(d) under the Securities Act, this Post-Effective Amendment No. 1 shall become effective immediately upon filing with the Securities and Exchange Commission. The contents of the Registration Statement are hereby incorporated by reference.
No new interests in the Registrant are being registered by this filing. The registration fee was paid in connection with Registrants previous filings.
OAKTREE STRATEGIC CREDIT FUND
PART C
Other Information
Item 25. Financial Statements and Exhibits
(1) Financial Statements
The following financial statements of Oaktree Strategic Credit Fund are provided in Part A of this Registration Statement:
Statement of Assets and Liabilities as of December 10, 2021
Notes to Financial Statement
(2) Exhibits
* | Filed herewith |
(1) | Incorporated by reference to the corresponding exhibit number to the Registrants Pre-Effective Registration Statement on Form N-2 (File No. 333-261775), filed on December 20, 2021. |
(2) | Incorporated by reference to the corresponding exhibit number to Amendment No. 1 to the Registrants Pre-Effective Registration Statement on Form N-2 (File No. 333-261775), filed on January 20, 2022. |
(3) | Incorporated by reference to exhibit 3.1 to the Registrants Current Report on Form 8-K, filed April 22, 2022 |
(4) | Incorporated by reference to exhibit 3.2 to the Registrants Current Report on Form 8-K, filed April 22, 2022 |
Item 26. Marketing Arrangements
The information contained under the heading Plan of Distribution on this Registration Statement is incorporated herein by reference.
Item 27. Other Expenses of Issuance and Distribution
SEC registration fee |
$ | 463,500 | ||
FINRA filing fee |
$ | 225,500 | ||
Legal |
$ | 2,968,000 | ||
Printing |
$ | 713,000 | ||
Accounting |
$ | 70,000 | ||
Blue Sky Expenses |
$ | 192,815 | ||
Advertising and Sales Literature |
$ | 706,000 | ||
Due Diligence |
$ | 318,000 | ||
Miscellaneous fees and expenses |
$ | 877,685 | ||
Total |
$ | 6,534,500 |
Item 28. Persons Controlled by or Under Common Control
Immediately prior to this offering, Oaktree Fund GP I, L.P., an affiliate of Oaktree Fund Advisors, LLC, will own 100% of the outstanding common shares of the Registrant. Following the completion of this offering, Oaktree Fund GP I, L.P.s share ownership is expected to represent less than 1% of the Registrants outstanding common shares. See Control Persons and Principal Shareholders in the prospectus contained herein.
Item 29. Number of Holders of Securities
The following table sets forth the approximate number of record holders of our common shares as of December 17, 2021.
Title of Class |
Number of Record Holders |
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Common shares of beneficial interest, $0.01 par value |
1 |
Item 30. Indemnification
The information contained under the heading Description of our Shares, Advisory Agreement and Administration Agreement and Plan of DistributionIndemnification in this Registration Statement is incorporated herein by reference.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to Trustees, officers and controlling persons of the Registrant pursuant to the provisions described above, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a Trustee, officer or controlling person in the successful defense of an action suit or proceeding) is asserted by a Trustee, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is again public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.
Prior to breaking escrow, the Registrant expects to obtain liability insurance for the benefit of its Trustees and officers (other than with respect to claims resulting from the willful misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office) on a claims-made basis.
Item 31. Business and Other Connections of Investment Advisor
A description of any other business, profession, vocation or employment of a substantial nature in which Oaktree Fund Advisors, LLC, and each managing director, director or executive officer of Oaktree Fund Advisors, LLC, is or has been during the past two fiscal years, engaged in for his or her own account or in the capacity of director, officer, employee, partner or trustee, is set forth in Part A of this Registration Statement in the sections entitled Management of the Fund. Additional information regarding Oaktree Fund Advisors, LLC and its officers and directors is set forth in its Form ADV, as filed with the SEC (File No. 801-112570), and is incorporated herein by reference.
Item 32. Location of Accounts and Records
All accounts, books and other documents required to be maintained by Section 31(a) of the Investment Company Act, and the rules thereunder are maintained at the offices of:
(1) | the Registrant; |
(2) | the Transfer Agent; |
(3) | the Custodian; |
(4) | the Adviser; and |
(5) | the Administrator. |
Item 33. Management Services
Not Applicable.
Item 34. Undertakings
We hereby undertake:
(1) to file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:
(i) | to include any prospectus required by Section 10(a)(3) of the Securities Act; |
(ii) | to reflect in the prospectus any facts or events after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the Calculation of Registration Fee table in the effective registration statement; and |
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) that, for the purpose of determining any liability under the Securities Act, each such post-effective amendment will be deemed to be a new registration statement relating to the securities offered therein, and the offering of those securities at that time will be deemed to be the initial bona fide offering thereof;
(3) to remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering;
(4) that, for the purpose of determining liability under the Securities Act to any purchaser, if the Registrant is subject to Rule 430C [17 CFR 230.430C]: Each prospectus filed pursuant to Rule 424(b) under the Securities Act as part of a registration statement relating to an offering, other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use;
(5) that, for the purpose of determining liability of the Registrant under the Securities Act to any purchaser in the initial distribution of securities, the undersigned Registrant undertakes that in an offering of securities of the undersigned Registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to the purchaser:
(i) | any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424 under the Securities Act; |
(ii) | free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrants; |
(iii) | the portion of any other free writing prospectus or advertisement pursuant to Rule 482 under the Securities Act [17 CFR 230.482] relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and |
(iv) | any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser. |
(6) that, for the purpose of determining any liability under the Securities Act:
(i) | the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant under Rule 424(b)(1) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective; and |
(ii) | each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of the securities at that time shall be deemed to be the initial bona fide offering thereof; and |
(7) to send by first class mail or other means designed to ensure equally prompt delivery, within two business days of receipt of a written or oral request, any prospectus or Statement of Additional Information.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Registration Statement on Form N-2 to be signed on its behalf by the undersigned, thereunto duly authorized, on the 22nd day of April, 2022.
OAKTREE STRATEGIC CREDIT FUND | ||
By: | /s/ Armen Panossian | |
Name: Armen Panossian | ||
Title: Chairperson, Chief Executive Officer and Trustee | ||
By: | /s/ Christopher McKown | |
Name: Christopher McKown | ||
Title: Chief Financial Officer and Treasurer |
Pursuant to the requirements of the Securities Act of 1933, this Registration Statement on Form N-2 has been signed by the following persons in the capacities and on the dates indicated.
Signature |
Title |
Date | ||
/s/ Armen Panossian Armen Panossian |
Chairperson, Chief Executive Officer and Trustee (Principal Executive Officer) | April 22, 2022 | ||
/s/ Christopher McKown Christopher McKown |
Chief Financial Officer and Treasurer (Principal Financial Officer and Principal Accounting Officer) | April 22, 2022 | ||
/s/ Jay Ferguson* Jay Ferguson |
Trustee | April 22, 2022 | ||
/s/ Deborah Gero* Deborah Gero |
Trustee | April 22, 2022 | ||
/s/ Allison Keller* Allison Keller |
Trustee | April 22, 2022 | ||
/s/ Stephen Mosko* Stephen Mosko |
Trustee | April 22, 2022 |
*By: | /s/ Armen Panossian | |
Name: | Armen Panossian | |
Title: | Attorney-in-Fact |
April 22, 2022
Executed pursuant to a power of attorney previously filed as an exhibit to this Registration Statement on December 20, 2021.
Exhibit (d)
FORM OF SUBSCRIPTION AGREEMENT
NOT FOR EXECUTION
Subscription Agreement for Shares of
Oaktree Strategic Credit Fund
1. Your Investment
A. Investment Information
Investment Amount $
B. Investment Type
☐ | Initial Investment |
☐ | Additional Investment |
C. Investment Method
☐ | By mail: Please make checks payable to UMB Bank Escrow Oaktree Strategic Credit Fund and attach to this agreement.* |
☐ | By wire: Please wire funds according to the instructions below. |
Account Name: UMB Bank Escrow Oaktree Strategic Credit Fund
Bank Name: UMB Bank, N.A.
ABA Routing No.: 101000695
Account No.: 98 7233 6321
FCC: [Investor Name]
☐ | Broker / Financial advisor will make payment on your behalf |
* | Cash, cashiers checks/official bank checks, temporary checks, foreign checks, money orders, third party checks, or travelers checks are not accepted. |
D. Share Class Selection
☐ Share Class S | ☐ Share Class D ** | ☐ Share Class I ** | ||
(The minimum investment is $2,500; minimum subsequent investment is $500) | (The minimum investment is $2,500; minimum subsequent investment is $500) | (The minimum investment is $1,000,000 (unless waived); minimum subsequent investment is $500) |
** | Available for certain fee-based wrap accounts and other eligible investors as disclosed in the prospectus, as amended and supplemented. |
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2. Ownership Type (Select only one)
A. Taxable Accounts |
B. Non-Taxable Accounts | |
Brokerage Account Number | Custodian Account Number | |
☐ Individual or Joint Tenant With Rights of Survivorship |
☐ IRA (Custodian Signature Required) | |
☐ Transfer on Death (Optional Designation. Not Available for Louisiana Residents. See Section 3C.) |
☐ Roth IRA (Custodian Signature Required) ☐ SEP IRA (Custodian Signature Required) | |
☐ Tenants in Common |
☐ Rollover IRA (Custodian Signature Required) | |
☐ Community Property ☐ Uniform Gift/Transfer to Minors |
☐ Inherited IRA ☐ Pension Plan (Include Certification of Investment Powers Form) | |
State of | ☐ Other | |
Date of Birth | ||
☐ Trust (Include Certification of Investment Powers Form or 1st and Last page of Trust Documents) |
C. Custodian Information (To Be Completed By Custodian) | |
☐ C Corporation |
Custodian Name | |
☐ S Corporation |
Custodian Tax ID # | |
☐ Profit-Sharing Plan |
Custodian Phone # | |
☐ Non-Profit Organization |
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☐ Limited Liability Corporation |
Custodian Stamp Here
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☐ Corporation / Partnership / Other (Corporate Resolution or Partnership Agreement Required)
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D. Entity Name Retirement Plan / Trust / Corporation / Partnership / Other
Trustee(s) and/or authorized signatory(s) information MUST be provided in Sections 3A and 3B
Entity Name |
Tax ID Number |
Date of Formation |
Exemptions | |||
(See Form W-9 instructions at www.irs.gov) | ||||||
Entity Address (Legal Address. Required) |
Entity Type (Select one. Required)
☐ Retirement Plan | ☐ Trust | ☐ S-Corp | ☐ C-Corp | ☐ LLC | ☐ Partnership | Exempt payee code (if any) |
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☐ Other | Jurisdiction (if Non-U.S.) | |
(Attach a completed applicable Form W-8) |
Exemption from FATCA reporting code (if any)
3. Investor Information
A. Investor Name (Investor / Trustee / Executor / Authorized Signatory Information)
Residential street address MUST be provided. See Section 4 if mailing address is different than residential street address
First Name (MI) |
Last Name |
Gender | ||||||
Social Security Number / Tax ID |
Date of Birth (MM/DD/YYYY) |
Daytime Phone Number | ||||||
Residential Street Address |
City |
State |
Zip Code | |||||
Email Address |
If you are a non-U.S. citizen, please specify your country of citizenship (required): | ||||
☐ Resident Alien ☐ Non-Resident Alien (Attach a completed Form W-8BEN) | ||||
Country of Citizenship |
Please specify if you are an Oaktree employee/officer/director/affiliate (required): ☐ Oaktree Employee ☐ Oaktree Officer or Director
☐ Immediate Family Member of Oaktree Officer or Director ☐ Oaktree Affiliate ☐ Not Applicable
B. Co-Investor Name (Co-Investor / Co-Trustee / Co-Authorized Signatory Information, if applicable)
First Name (MI) |
Last Name |
Gender | ||||||
Social Security Number / Tax ID |
Date of Birth (MM/DD/YYYY) |
Daytime Phone Number | ||||||
Residential Street Address |
City |
State |
Zip Code | |||||
Email Address |
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If you are a non-U.S. citizen, please specify your country of citizenship (required): | ||||
☐ Resident Alien ☐ Non-Resident Alien (Attach a completed Form W-8BEN) | ||||
Country of Citizenship |
Please specify if you are a Oaktree employee/officer/director/affiliate (required): ☐ Oaktree Employee ☐ Oaktree Officer or Director
☐ Immediate Family Member of Oaktree Officer or Director ☐ Oaktree Affiliate ☐ Not Applicable
C. Transfer on Death Beneficiary Information (Individual or Joint Account with rights of survivorship only. Not available for Louisiana residents. Beneficiary date of birth required. Whole percentages only; must equal 100%.)
☐ Primary | ||||||||||
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First Name | (MI) | Last Name | SSN | Date of Birth (MM/DD/YYYY) |
☐ Secondary % | |||||
☐ Primary | ||||||||||
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First Name | (MI) | Last Name | SSN | Date of Birth (MM/DD/YYYY) |
☐ Secondary % | |||||
☐ Primary | ||||||||||
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First Name | (MI) | Last Name | SSN | Date of Birth (MM/DD/YYYY) |
☐ Secondary % | |||||
☐ Primary | ||||||||||
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First Name | (MI) | Last Name | SSN | Date of Birth (MM/DD/YYYY) |
☐ Secondary % |
Custodian/Guardian for a minor Beneficiary (required, cannot be same as Investor or Co-Investor):
D. ERISA Plan Asset Regulations
All investors are required to complete Appendix B attached hereto.
4. Contact Information (If different than provided in Section 3A)
Mailing Address |
City |
State |
Zip Code |
5. Select How You Want to Receive Your Distributions (Please Read Entire Section and Select only one)
You are NOT automatically enrolled in our Distribution Reinvestment Plan if you are a resident of ALABAMA, ARKANSAS, IDAHO, KANSAS, KENTUCKY, MAINE, MARYLAND, NEBRASKA, NEW JERSEY, NORTH CAROLINA, OHIO, OREGON, TEXAS, VERMONT OR WASHINGTON.
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☐ If you ARE a resident of any of the foregoing states, please check here if you wish to enroll in the Distribution Reinvestment Plan. You will automatically receive cash distributions unless you elect to enroll in the Distribution Reinvestment Plan.
☐ If you are not a resident of the states listed above, you are automatically enrolled in the Distribution Reinvestment Plan; please check here if you DO NOT wish to be enrolled in the Distribution Reinvestment Plan and complete the Cash Distribution Information section below.
If you elect to opt out of the Distribution Reinvestment Plan, you will receive any distributions we declare in cash. You may change your election by contacting the Plan Administrator at 844-825-0488. If your shares are held by a broker or other financial intermediary, you may change your election by notifying your broker or other financial intermediary of your election.
ONLY complete the following information if you do not wish to enroll in the Distribution Reinvestment Plan. For custodial held accounts, if you elect cash distributions the funds must be sent to the custodian.
A. ☐ Check mailed to street address in 3A (only available for non-custodial investors).
B. ☐ Check mailed to secondary address in 3B (only available for non-custodial investors).
C. ☐ Direct Deposit by ACH (only available for non-custodial investors). PLEASE ATTACH A PRE-VOIDED CHECK.
D. ☐ Check mailed to Third party Financial Institution (complete section below).
I authorize Oaktree Strategic Credit Fund or its agent to deposit my distribution into my checking or savings account. This authority will remain in force until I notify Oaktree Strategic Credit Fund in writing to cancel it. In the event that Oaktree Strategic Credit Fund deposits funds erroneously into my account, they are authorized to debit my account for an amount not to exceed the amount of the erroneous deposit.
Financial Institution Name |
Mailing Address |
City |
State |
Zip Code | ||||
Your Banks ABA Routing Number |
Your Bank Account Number |
6. Broker / Financial Advisor Information (Required Information. All fields must be completed.)
The Financial Advisor must sign below to complete the order. The Financial Advisor hereby warrants that he/she is duly licensed and may lawfully sell shares in the state designated as the investors legal residence.
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Broker | Financial Advisor Name | |
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Advisor Mailing Address | ||
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City | State Zip Code | |
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Financial Advisor Number | Branch Number Telephone Number |
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E-mail Address | Fax Number | |
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Operations Contact Name | Operations Contact Email Address |
Please note that unless previously agreed to in writing by Oaktree Strategic Credit Fund, all sales of securities must be made through a Broker, including when a Registered Investment Adviser has introduced the sale. In all cases, Section 6 must be completed.
The undersigned confirm(s), which confirmation is made on behalf of the Broker with respect to sales of securities made through a Broker, that they (i) have reasonable grounds to believe that the information and representations concerning the investor identified herein are true, correct and complete in all respects; (ii) have discussed such investors prospective purchase of shares with such investor; (iii) have advised such investor of all pertinent facts with regard to the lack of liquidity and marketability of the shares; (iv) have delivered or made available a current prospectus and related supplements, if any, to such investor; (v) have reasonable grounds to believe that the investor is purchasing these shares for his or her own account; (vi) have reasonable grounds to believe that the purchase of shares is a suitable investment for such investor, that such investor meets the suitability standards applicable to such investor set forth in the prospectus and related supplements, if any, and that such investor is in a financial position to enable such investor to realize the benefits of such an investment and to suffer any loss that may occur with respect thereto; and (vii) have advised such investor that the shares have not been registered and are not expected to be registered under the laws of any country or jurisdiction outside of the United States except as otherwise described in the prospectus. The undersigned Broker, Financial Advisor or Financial Representative listed in Section 6 further represents and certifies that, in connection with this subscription for shares, he/she has complied with and has followed all applicable policies and procedures of his or her firm relating to, and performed functions required by, federal and state securities laws, rules promulgated under the Securities Exchange Act of 1934, as amended, including, but not limited to Rule 15l-1 (Regulation Best Interest) and FINRA rules and regulations including, but not limited to Know Your Customer, Suitability and PATRIOT Act (Anti Money Laundering, Customer Identification) as required by his or her relationship with the investor(s) identified on this document.
THIS SUBSCRIPTION AGREEMENT AND ALL RIGHTS HEREUNDER SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE.
If you do not have another broker or other financial intermediary introducing you to Oaktree Strategic Credit Fund, Brookfield Oaktree Wealth Solutions LLC (BOWS) may be deemed to act as your broker of record in connection with any investment in Oaktree Strategic Credit Fund. BOWS is not a full-service broker-dealer and may not provide the kinds of financial services that you might expect from another financial intermediary, such as holding securities in an account. If BOWS is your broker of record, then your shares will be held in your name on the books of Oaktree Strategic Credit Fund. BOWS will not monitor your investments, and has not and will not make any recommendation regarding your investments. If you want to receive financial advice regarding a prospective investment in the shares, contact your broker or other financial intermediary.
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Financial Advisor Signature | Date | Branch Manager Signature | Date | |||||||||||||||||||
(if required by Broker) |
7. Electronic Delivery Form (Optional)
Instead of receiving paper copies of the prospectus, prospectus supplements, annual reports, proxy statements, and other shareholder communications and reports, you may elect to receive electronic delivery of shareholder communications from Oaktree Strategic Credit Fund. If you would like to consent to electronic delivery, including pursuant to email, please sign your initials where indicated below for this election.
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We encourage you to reduce printing and mailing costs and to conserve natural resources by electing to receive electronic delivery of shareholder communications and statement notifications. By consenting below to electronically receive shareholder communications, including your account-specific information, you authorize Oaktree Strategic Credit Fund to either (i) email shareholder communications to you directly or (ii) make them available on our website and notify you by email when and where such documents are available.
You will not receive paper copies of these electronic materials unless specifically requested, the delivery of electronic materials is prohibited or we, in our sole discretion, elect to send paper copies of the materials. You may revoke your consent for electronic delivery at any time by contacting Oaktree Strategic Credit Fund at (855) 777-8001 and we will resume sending you a paper copy of all required documents.
By consenting to electronic access, you will be responsible for certain costs, such as your customary internet service provider charges, and may be required to download software in connection with access to these materials. You understand this electronic delivery program may be changed or discontinued and that the terms of this agreement may be amended at any time. You understand that there are possible risks associated with electronic delivery such as emails not transmitting, links failing to function properly and system failure of online service providers, and that there is no warranty or guarantee given concerning the transmissions of email, the availability of the website, or information on it, other than as required by law.
I consent to electronic delivery
E-mail Address
If blank, the email provided in Section 3A and/or 3B will be used. If no email is provided, you will receive paper copies mailed to your address.
8. Subscriber Signatures
Oaktree Strategic Credit Fund is required by law to obtain, verify and record certain personal information from you or persons on your behalf in order to establish the account. Required information includes name, date of birth, permanent residential address and social security/taxpayer identification number. We may also ask to see other identifying documents. If you do not provide the information, Oaktree Strategic Credit Fund may not be able to open your account. By signing the Subscription Agreement, you agree to provide this information and confirm that this information is true and correct. If we are unable to verify your identity, or that of another person(s) authorized to act on your behalf, or if we believe we have identified potentially criminal activity, we reserve the right to take action as we deem appropriate which may include closing your account.
Please separately initial each of the representations below. Except in the case of fiduciary accounts, you may not grant any person a power of attorney to make the representations on your behalf.
8.a. Please Note: All Items in this section 8.a. must be read and initialed
In order to induce Oaktree Strategic Credit Fund to accept this subscription, I hereby represent and warrant to you as follows:
Primary Investor Initials |
Co-Investor Initials | |||||||||
(i) | I have received the prospectus (as amended or supplemented) for Oaktree Strategic Credit Fund at least five business days prior to the date hereof. | |||||||||
Initials | Initials | |||||||||
(ii) | I have (A) a minimum net worth (not including home, home furnishings and personal automobiles) of at least $250,000, or (B) a minimum net worth (as previously described) of at least $70,000 and a minimum annual gross income of at least $70,000. | |||||||||
Initials | Initials |
7
Primary Investor Initials |
Co-Investor | |||||||||
(iii) | In addition to the minimum income and net worth standards described above, I have reviewed the higher suitability requirements, if any, imposed by my state of primary residence as set forth in the prospectus under SUITABILITY STANDARDS and have acknowledged that I meet such higher suitability requirements, if any, by including my initials where indicated in Appendix A to this Subscription Agreement. | |||||||||
Initials | Initials | |||||||||
(iv) | If I am an entity that was formed for the purpose of purchasing shares, each individual that owns an interest in such entity meets the minimum income and net worth standards described above. | |||||||||
Initials | Initials | |||||||||
(v) | I acknowledge that there is no public market for the shares, shares of this offering are not liquid and appropriate only as a long-term investment. | |||||||||
Initials | Initials | |||||||||
(vi) | I acknowledge that the shares have not been registered and are not expected to be registered under the laws of any country or jurisdiction outside of the United States except as otherwise described in the prospectus. | |||||||||
Initials | Initials | |||||||||
(vii) | I am purchasing the shares for my own account, or if I am purchasing shares on behalf of a trust or other entity of which I am a trustee or authorized agent, I have due authority to execute this subscription agreement and do hereby legally bind the trust or other entity of which I am trustee or authorized agent. | |||||||||
Initials | Initials | |||||||||
(viii) | I acknowledge that Oaktree Strategic Credit Fund may enter into transactions with Oaktree affiliates that involve conflicts of interest as described in the prospectus. | |||||||||
Initials | Initials | |||||||||
(ix) | I acknowledge that subscriptions must be submitted at least five business days prior to the first day of each month and that my investment will be effective as of the first day of the applicable month at the NAV per share as of the preceding day. I acknowledge that I will not know the NAV per share at which my investment will be effective at the time I subscribe and that the NAV per share as of the last day of each month will generally be made available at https://www.brookfieldoaktree.com within 20 business days of the last day of each month. | |||||||||
Initials | Initials | |||||||||
(x) | I acknowledge that if my subscription request is received less than five business days prior to the first day of the month, unless waived, my investment will be effective as of the first day of the next month at the NAV per share as of the preceding day. | |||||||||
Initials | Initials |
8
Primary Investor Initials |
Co-Investor Initials | |||||||||
(xi) | I acknowledge that my subscription request will not be accepted any earlier than two business days before the first calendar day of each month. | |||||||||
Initials | Initials | |||||||||
(xii) | I acknowledge that I am not committed to purchase shares at the time my subscription request is submitted and before it has been accepted, and I may cancel my subscription at any time before it has been accepted, which will not be earlier than two business days before the first calendar day of the next month. I understand that I may cancel my subscription request by notifying the transfer agent, through my financial intermediary or by notifying Oaktree Strategic Credit Fund directly on Oaktree Strategic Credit Funds toll-free, automated telephone line, (855) 777-8001. | |||||||||
Initials | Initials |
8.b. If you live in any of the following states, please complete Appendix A to Oaktree Strategic Credit Fund Subscription Agreement: Alabama, California, Idaho, Iowa, Kansas, Kentucky, Maine, Massachusetts, Missouri, Nebraska, New Jersey, New Mexico, North Dakota, Ohio, Oklahoma, Oregon, Puerto Rico, Tennessee and Vermont
In the case of sales to fiduciary accounts, the minimum standards in Appendix A shall be met by the beneficiary, the fiduciary, account, or, by the donor or grantor, who directly or indirectly supplies the funds to purchase the shares if the donor or grantor is the fiduciary.
If you do not have another broker or other financial intermediary introducing you to Oaktree Strategic Credit Fund, then BOWS may be deemed to be acting as your broker of record in connection with any investment in Oaktree Strategic Credit Fund. For important information in this respect, see Section 6 above.
I declare that the information supplied in this Subscription Agreement is true and correct and may be relied upon by Oaktree Strategic Credit Fund. I acknowledge that the Broker / Financial Advisor (Broker / Financial Advisor of record) indicated in Section 6 of this Subscription Agreement and its designated clearing agent, if any, will have full access to my account information, including the number of shares I own, tax information (including the Form 1099) and redemption information.
SUBSTITUTE IRS FORM W-9 CERTIFICATIONS (required for U.S. investors):
Under penalties of perjury, I certify that:
(1) | The number shown on this Subscription Agreement is my correct taxpayer identification number (or I am waiting for a number to be issued to me); and |
(2) | I am not subject to backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by the Internal Revenue Service (IRS) that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding; and |
(3) | I am a U.S. citizen or other U.S. person (including a resident alien) (defined in IRS Form W-9); and |
(4) | The FATCA code(s) entered on this Subscription Agreement (if any) indicating that I am exempt from FATCA reporting is correct. |
Certification instructions. You must cross out item 2 above if you have been notified by the IRS that you are currently subject to backup withholding because you have failed to report all interest and dividends on your tax return.
9
The IRS does not require your consent to any provision of this document other than the certifications required to avoid backup withholding.
X |
X | |||||||||||||||||||||
Signature of Investor | Date | Signature of Co-Investor or Custodian (If applicable) |
Date |
(MUST BE SIGNED BY CUSTODIAN OR TRUSTEE IF PLAN IS ADMINISTERED BY A THIRD PARTY)
9. Miscellaneous
If investors participating in the Distribution Reinvestment Plan or making subsequent purchases of shares of Oaktree Strategic Credit Fund experience a material adverse change in their financial condition or can no longer make the representations or warranties set forth in Section 8 above, they are asked to promptly notify Oaktree Strategic Credit Fund and the Broker in writing. The Broker may notify Oaktree Strategic Credit Fund if an investor participating in the Distribution Reinvestment Plan can no longer make the representations or warranties set forth in Section 8 above, and Oaktree Strategic Credit Fund may rely on such notification to terminate such investors participation in the Distribution Reinvestment Plan.
No sale of shares may be completed until at least five business days after you receive the final prospectus. To be accepted, a subscription request must be made with a completed and executed subscription agreement with appropriate responses and payment of the full purchase price at least five business prior to the first calendar day of the month (unless waived). You will receive a written confirmation of your purchase.
Investors may change their Broker / Financial Advisor of record at any time by contacting Oaktree Strategic Credit Fund Investor Relations at the number indicated below.
All items on the Subscription Agreement must be completed in order for your subscription to be processed. Subscribers are encouraged to read the prospectus in its entirety for a complete explanation of an investment in the shares of Oaktree Strategic Credit Fund.
Return the completed Subscription Agreement to:
Oaktree Strategic Credit Fund
PO Box 219790
Kansas City, MO 64121-9790
Street and Overnight Address:
Oaktree Strategic Credit Fund
430 W 7th Street Suite 219790
Kansas City, MO 64105-1407
Oaktree Strategic Credit Fund Investor Relations: (855) 777-8001
10
Appendix A
For purposes of determining whether you satisfy the standards below, your net worth is calculated excluding the value of your home, home furnishings and automobiles, and, unless otherwise indicated, liquid net worth is defined as that portion of net worth that consists of cash, cash equivalents and readily marketable investments.
Investors in the following states have the additional suitability standards as set forth below.
Primary Initials |
Co-Investor Initials | |||||||
If I am an Alabama resident, in addition to the suitability standards set forth above, an investment in Oaktree Strategic Credit Fund will only be sold to me if I have a liquid net worth of at least 10 times my investment in Oaktree Strategic Credit Fund and its affiliates. | ||||||||
Initials | Initials | |||||||
If I am a California resident, in addition to the suitability standards set forth above, I may not invest more than 10% of my net worth in Oaktree Strategic Credit Fund. | ||||||||
Initials | Initials | |||||||
If I am an Idaho resident, I must have either (a) a liquid net worth of $85,000 and annual gross income of $85,000 or (b) a liquid net worth of $300,000. Additionally, the total investment in Oaktree Strategic Credit Fund shall not exceed 10% of my liquid net worth. | ||||||||
Initials | Initials | |||||||
If I am an Iowa resident, I (i) have either (a) an annual gross income of at least $100,000 and a net worth of at least $100,000, or (b) a net worth of at least $350,000 (net worth should be determined exclusive of home, auto and home furnishings); and (ii) limit my aggregate investment in this offering and in the securities of other non-traded business development companies to 10% of my liquid net worth (liquid net worth should be determined as that portion of net worth that consists of cash, cash equivalents and readily marketable securities). | ||||||||
Initials | Initials | |||||||
If I am a Kansas resident, I acknowledge that it is recommended by the Office of the Securities Commissioner that I limit my total investment in Oaktree Strategic Credit Funds securities and other non-traded business development companies to not more than 10% of my liquid net worth. For these purposes, liquid net worth shall be defined as that portion of total net worth (total assets minus total liabilities) that is comprised of cash, cash equivalents and readily marketable securities. | ||||||||
Initials | Initials |
11
Primary Initials |
Co-Investor Initials | |||||||
If I am a Kentucky resident, I may not invest more than 10% of my liquid net worth in Oaktree Strategic Credit Fund or its affiliates. Liquid net worth is defined as that portion of net worth that is comprised of cash, cash equivalents and readily marketable securities. | ||||||||
Initials | Initials | |||||||
If I am a Maine resident, I acknowledge that it is recommended by the Maine Office of Securities that my aggregate investment in this offering and other similar direct participation investments not exceed 10% of my liquid net worth. For this purpose, liquid net worth is defined as that portion of net worth that consists of cash, cash equivalents and readily marketable securities. | ||||||||
Initials | Initials | |||||||
If I am a Massachusetts resident, in addition to the suitability standards set forth above, I may not invest more than 10% of my liquid net worth in Oaktree Strategic Credit Fund and in other illiquid direct participation programs. | ||||||||
Initials | Initials | |||||||
If I am a Missouri resident, in addition to the suitability standards set forth above, I may not invest more than 10% of my liquid net worth in Oaktree Strategic Credit Fund. | ||||||||
Initials | Initials | |||||||
If I am a Nebraska resident, in addition to the suitability standards set forth above, I must limit my aggregate investment in this offering and the securities of other business development companies to 10% of my net worth. (Investors who are accredited investors as defined in Regulation D under the Securities Act of 1933 are not subject to the foregoing investment concentration limit.) | ||||||||
Initials | Initials | |||||||
If I am a New Jersey resident, (1) I have either (a) a minimum liquid net worth of at least $100,000 and a minimum annual gross income of not less than $85,000, or (b) a minimum liquid net worth of $350,000. For these purposes, liquid net worth is defined as that portion of net worth (total assets exclusive of home, home furnishings, and automobiles, minus total liabilities) that consists of cash, cash equivalents and readily marketable securities. In addition, my total investment in Oaktree Strategic Credit Fund, its affiliates and other non-publicly traded direct investment programs (including real estate investment trusts, business development companies, oil and gas programs, equipment leasing programs and commodity pools, but excluding unregistered, federally and state exempt private offerings) may not exceed 10% of my liquid net worth. | ||||||||
Initials | Initials |
12
Primary Initials |
Co-Investor Initials | |||||||
If I am a New Mexico resident, in addition to the general suitability standards listed above, I may not invest, and Oaktree Strategic Credit Fund may not accept from me more than ten percent (10%) of my liquid net worth in shares of Oaktree Strategic Credit Fund, its affiliates and in other non-traded business development companies. Liquid net worth is defined as that portion of net worth which consists of cash, cash equivalents and readily marketable securities. | ||||||||
Initials | Initials | |||||||
If I am a North Dakota resident, I have a net worth of at least ten times my investment in Oaktree Strategic Credit Fund. | ||||||||
Initials | Initials | |||||||
If I am an Ohio resident, it is unsuitable to invest more than 10% of my liquid net worth in Oaktree Strategic Credit Fund, its affiliates, and in any other non-traded business development company. Liquid net worth is defined as that portion of net worth (total assets exclusive of primary residence, home furnishings and automobiles minus, total liabilities) comprised of cash, cash equivalents and readily marketable securities. | ||||||||
Initials | Initials | |||||||
If I am an Oklahoma resident, I may not invest more than 10% of my liquid net worth in Oaktree Strategic Credit Fund. | ||||||||
Initials | Initials | |||||||
If I am an Oregon resident, in addition to the suitability standards set forth above, I may not invest more than 10% of my liquid net worth in Oaktree Strategic Credit Fund and its affiliates. Liquid net worth is defined as net worth excluding the value of the investors home, home furnishings and automobile. | ||||||||
Initials | Initials | |||||||
If I am a Puerto Rico resident, I may not invest more than 10% of my liquid net worth in Oaktree Strategic Credit Fund, its affiliates and other non-traded business development companies. For these purposes, liquid net worth is defined as that portion of net worth (total assets exclusive of primary residence, home furnishings and automobiles minus total liabilities) consisting of cash, cash equivalents and readily marketable securities. | ||||||||
Initials | Initials | |||||||
If I am a Tennessee resident, I must have a liquid net worth of at least ten times my investment in Oaktree Strategic Credit Fund. | ||||||||
Initials | Initials | |||||||
If I am a Vermont resident and I am an accredited investor in Vermont, as defined in 17 C.F.R. § 230.501, I may invest freely in this offering. In addition to the suitability standards described above, if I am a non-accredited Vermont investor, I may not purchase an amount in this offering that exceeds 10% of my liquid net worth. For these purposes, liquid net worth is defined as an investors total assets (not including home, home furnishings or automobiles) minus total liabilities. | ||||||||
Initials | Initials |
13
Appendix B
Instructions: All purchasers please complete this Appendix B in its entirety.
1. Are you a benefit plan investor within the meaning of the Plan Asset Regulations1 or will you use the assets of a benefit plan investor2 to invest in Oaktree Strategic Credit Fund?
☐ Yes ☐ No
2. If Question (1) above is yes please indicate what percentage of your assets invested in Oaktree Strategic Credit Fund are considered to be the assets of benefit plan investors within the meaning of the Plan Asset Regulations:
%
3. If you are investing the assets of an insurance company general account please indicate what percentage of the insurance company general accounts assets invested in Oaktree Strategic Credit Fund are the assets of benefit plan investors within the meaning of Section 401(c)(1)(A) of the Employee Retirement Income Security Act of 1974, as amended, or the regulations promulgated thereunder?
%
4. Please indicate if you are a Controlling Person defined as: (i) a person (including an entity), other than a benefit plan investor who has discretionary authority or control with respect to the assets of Oaktree Strategic Credit Fund, a person who provides investment advice for a fee (direct or indirect) with respect to such assets, or any affiliate of such a person. An affiliate of a person includes any person, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the person. For purposes of this definition, control, with respect to a person other than an individual, means the power to exercise a controlling influence over the management or policies of such person.
☐ Yes ☐ No
1 | Plan Asset Regulations means the regulations issued by the United States Department of Labor at Section 2510.3-101 of Part 2510 of Chapter XXV, Title 29 of the United States Code of Federal Regulations, as modified by Section 3(42) of ERISA, as the same may be amended from time to time. |
2 | The term benefit plan investor includes, e.g.: (i) an employee benefit plan as defined in section 3(3) of the U.S. Employee Retirement Income Security Act of 1974, as amended (ERISA), that is subject to Title I of ERISA (such as employee welfare benefit plans (generally, plans that provide for health, medical or other welfare benefits) and employee pension benefit plans (generally, plans that provide for retirement or pension income)); (ii) plans described in section 4975(e)(1) of the U.S. Internal Revenue Code of 1986, as amended (the Code), that are subject to section 4975 of the Code (including, e.g., an individual retirement account, an individual retirement annuity, a Keogh plan, a pension plan, an Archer MSA described in section 220(d) of the Code, a Coverdell education savings account described in section 530 of the Code and a health savings account described in section 223(d) of the Code) and (iii) an entity that is, or whose assets would be deemed to constitute the assets of, one or more employee benefit plans or plans (such as e.g., a master trust or a plan assets fund) under ERISA or the Plan Asset Regulations. |
14
Exhibit (g)
AMENDED AND RESTATED INVESTMENT ADVISORY AGREEMENT
BETWEEN
OAKTREE STRATEGIC CREDIT FUND
AND
OAKTREE FUND ADVISORS, LLC
This Amended and Restated Investment Advisory Agreement (this Agreement) made effective as of April 20, 2022 (the Effective Date), by and between Oaktree Strategic Credit Fund, a Delaware statutory trust (the Company), and Oaktree Fund Advisors, LLC a Delaware limited liability company (the Adviser), amending and restating, in its entirety, the Investment Advisory Agreement, effective as of February 3, 2022, between the Company and the Adviser.
WHEREAS, the Company is a closed-end management investment company that has elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (the Investment Company Act); and
WHEREAS, the Adviser is registered under the Investment Advisers Act of 1940, as amended (the Advisers Act); and
WHEREAS, the Company desires to retain the Adviser to furnish investment advisory services to the Company on the terms and conditions hereinafter set forth, and the Adviser wishes to be retained to provide such services;
NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the parties hereby agree as follows:
1. Duties of the Adviser.
(a) The Company hereby appoints the Adviser to act as the investment adviser to the Company and to manage the investment and reinvestment of the assets of the Company, subject to the supervision of the Board of Trustees of the Company (the Board), for the period and upon the terms herein set forth, (i) in accordance with the investment objective, policies and restrictions that are set forth in the reports and/or registration statements that the Company files with the Securities and Exchange Commission (the SEC) from time to time; (ii) in accordance with all other applicable federal and state laws, rules and regulations, and the Companys declaration of trust (the Declaration of Trust) and by-laws; and (iii) in accordance with the Investment Company Act. Without limiting the generality of the foregoing, the Adviser shall, during the term and subject to the provisions of this Agreement:
(A) determine the composition of the portfolio of the Company, the nature and timing of the changes therein and the manner of implementing such changes;
(B) identify, evaluate and negotiate the structure of the investments made by the Company;
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(C) execute, close, monitor and service the Companys investments;
(D) determine the securities and other assets that the Company will purchase, retain, or sell;
(E) perform due diligence on prospective portfolio companies; and
(F) provide the Company with such other investment advisory, research and related services as the Company may, from time to time, reasonably require for the investment of its funds.
(G) The Adviser shall, upon request by an official or agency administering the securities laws of a state (a State Administrator), submit to such State Administrator the reports and statements required to be distributed to the Companys shareholders pursuant to this Agreement, any registration statement filed with the SEC and applicable federal and state law.
(H) The Adviser has a fiduciary responsibility and duty to the Company for the safekeeping and use of all the funds and assets of the Company, whether or not in the Advisers immediate possession or control. The Adviser shall not employ, or permit another to employ, such funds or assets except for the exclusive benefit of the Company. The Adviser shall not contract away any fiduciary obligation owed by the Adviser to the Companys shareholders under common law.
(b) The Adviser shall have the power and authority on behalf of the Company to effectuate its investment decisions for the Company, including the negotiation, execution and delivery of all documents relating to the Companys investments and the placing of orders for other purchase or sale transactions on behalf of the Company. The Adviser is hereby authorized, on behalf of the Company and at the direction of the Board pursuant to delegated authority, to possess, transfer, mortgage, pledge or otherwise deal in, and exercise all rights, powers, privileges and other incidents of ownership or possession with respect to, the Companys investments and other property and funds held or owned by the Company, including, without limitation, exercising and enforcing rights with respect to any claims relating to such investments and other property and funds, including with respect to litigation, bankruptcy or other reorganization.
(c) The Adviser hereby accepts such appointment and agrees during the term hereof to render the services described herein for the compensation provided herein.
(d) The Adviser is hereby authorized to enter into one or more sub-advisory agreements with other investment advisers (each, a Sub-Adviser) pursuant to which the Adviser may obtain the services of the Sub-Adviser(s) to assist the Adviser in fulfilling its responsibilities hereunder. Specifically, the Adviser may retain a Sub-Adviser to recommend specific securities or other investments based upon the Companys investment objective and policies, and work, along with the Adviser, in structuring, negotiating, arranging or effecting the acquisition or disposition of such investments and monitoring investments on behalf of the Company, subject to the oversight of the Adviser and the Company. The Adviser, and not the Company, shall be responsible for any compensation payable to any Sub-Adviser. Any sub-advisory agreement entered into by the Adviser shall be in accordance with the requirements of the Investment Company Act and other applicable federal and state law.
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(e) The Adviser shall, for all purposes herein provided, be deemed to be an independent contractor and, except as expressly provided or authorized herein, shall have no authority to act for or represent the Company in any way or otherwise be deemed an agent of the Company.
(f) Subject to review by and the overall control of the Board, the Adviser shall keep and preserve, in the manner and for the period required by the Investment Company Act, any books and records relevant to the provision of its investment advisory services to the Company and shall specifically maintain all books and records with respect to the Companys portfolio transactions and shall render to the Board such periodic and special reports as the Board may reasonably request. The Adviser agrees that all records that it maintains for the Company are the property of the Company and shall surrender promptly to the Company any such records upon the Companys request, provided that the Adviser may retain a copy of such records.
2. Companys Responsibilities and Expenses Payable by the Company.
All personnel of the Adviser, when and to the extent engaged in providing investment advisory services hereunder, and the compensation and routine overhead expenses of such personnel allocable to such services, shall be provided and paid for by the Adviser and not by the Company. The Company shall bear all other costs and expenses of its organization, operations, administration and transactions, including (without limitation) fees and expenses relating to: (a) all costs, fees, expenses and liabilities incurred in connection with the formation and organization of the Company and the offering and sale of the Companys Common Shares, including expenses of registering or qualifying securities held by the Company for sale and blue sky filing fees, costs associated with technology integration between the Companys systems and those of participating intermediaries, reasonable bona fide due diligence expenses of participating intermediaries supported by detailed and itemized invoices, costs in connection with preparing sales materials and other marketing expenses, design and website expenses, fees and expenses of the Companys escrow agent and transfer agent, fees to attend retail seminars sponsored by participating intermediaries and costs, expenses and reimbursements for travel, meals, accommodations, entertainment and other similar expenses related to meetings or events with prospective investors, intermediaries, registered investment advisors or financial or other advisors, but excluding the shareholder servicing fee; (b) diligence and monitoring of the Companys financial, regulatory and legal affairs, and, if necessary, enforcing rights in respect of investments (to the extent an investment opportunity is being considered for the Company and any other funds or accounts managed by the Adviser or its affiliates, the Advisers out-of-pocket expenses related to the due diligence for such investment will be shared with such other funds and accounts pro rata based on the anticipated allocation of such investment opportunity between the Company and the other funds and accounts); (c) the cost of calculating the Companys net asset value (including the cost of any third-party valuation firms); (d) the cost of effecting sales and repurchases of the Common Shares and other securities; (e) Management and Incentive Fees (each as defined below) payable pursuant to this Agreement; (f) fees and expenses payable under any distribution manager and selected intermediary agreements, if any; (g) costs and expenses of any sub-administration agreements entered into by the Administrator (as defined below); (h) fees payable to third parties
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relating to, or associated with, making investments and valuing investments (including third-party valuation firms); (i) retainer, finders, placement, adviser, consultant, custodian, sub-custodian, depository (including a depository appointed pursuant to the AIFM Directive (as defined below) or pursuant to any national private placement regime in any jurisdiction, a Swiss representative and paying agent appointed pursuant to the Swiss representative and paying agent appointed pursuant to the Swiss Collective Investment Schemes Act (as amended) and the implementation thereof), transfer agent, trustee, disbursal, brokerage, registration, legal and other similar fees, commissions and expenses attributable to making or holding investments; (j) the reporting, filing and other compliance requirements (including expenses associated with the initial registrations, filings and compliance) contemplated by the AIFM Directive or any national private placement regime in any jurisdiction (including any reporting required in connection with Annex IV of the AIFM Directive); (k) fees and expenses associated with marketing efforts (including travel and attendance at investment conferences and similar events); (l) allocable out-of-pocket costs incurred in providing managerial assistance to those portfolio companies that request it; (m) fees, interest and other costs payable on or in connection with any indebtedness; (n) federal and state registration fees and other governmental charges; (o) any exchange listing fees; (p) federal, state and local taxes; (p) independent trustees fees and expenses; (q) brokerage commissions; (r) costs of proxy statements, shareholders reports and notices and any other regulatory reporting expenses; (s) costs of preparing government filings, including periodic and current reports with the SEC; (t) fidelity bond, liability insurance and other insurance premiums; (u) printing, mailing, independent accountants and outside legal costs; (v) costs of winding up and liquidation; (w) litigation, indemnification and other extraordinary or non-recurring expenses; (x) dues, fees and charges of any trade association of which the Company is a member; (y) research and software expenses, quotation equipment and services and other expenses incurred in connection with data services, including subscription costs, providing real-time price feeds, real-time news feeds, securities and company information, and company fundamental data attributable to such investments; (z) costs and expenses relating to investor reporting and communications; (aa) costs of preparing financial statements and maintaining books and records, costs of Sarbanes-Oxley Act of 2002 compliance and attestation and costs of preparing and filing reports or other documents with the SEC, Financial Industry Regulatory Authority, the Commodity Futures Trading Commission and other regulatory bodies and other reporting and compliance costs, including registration and exchange listing and the costs associated with reporting and compliance obligations under the Investment Company Act and any other applicable federal and state securities laws, and the compensation of professionals responsible for the foregoing; (bb) all other out-of-pocket expenses, fees and liabilities that are incurred by the Company or by the Adviser on behalf of the Company or that arise out of the operation and activities of the Company, including expenses related to organizing and maintaining persons through or in which investments may be made and the allocable portion of any Adviser costs, including personnel, incurred in connection therewith; (cc) accounting expenses, including expenses associated with the preparation of the financial statements and tax information reporting returns of the Company and the filing of various tax withholding forms and treaty forms by the Company; (cc) the allocable portion of the compensation of the Companys Chief Financial Officer and Chief Compliance Officer and their respective staffs; and (dd) all other expenses incurred by Oaktree Fund Administration, LLC, as administrator (the Administrator), pursuant to the Administration Agreement, dated as of February 3, 2022 (the Administration Agreement), between the Administrator and the Company, an affiliate of the Administrator or the Company in connection with administering the Companys business, including payments under the
-4-
Administration Agreement to the Administrator or such affiliate in an amount equal to the Companys allocable portion of overhead and other expenses incurred by the Administrator or such affiliate in performing its obligations and services under the Administration Agreement, such as rent and the Companys allocable portion of the cost of personnel attributable to performing such obligations and services, including, but not limited to, marketing, legal and other services performed by the Administrator or such affiliate for the Company. For the avoidance of doubt, the Company will bear its allocable portion of the costs of the compensation, benefits, and related administrative expenses (including travel expenses) of the Companys officers who provide operational and administrative services pursuant to the Administration Agreement, their respective staffs and other professionals who provide services to the Company (including, in each case, employees of the Administrator or an affiliate) who assist with the preparation, coordination, and administration of the foregoing or provide other back office or middle office financial or operational services to the Company. Notwithstanding anything to the contrary contained herein, the Company shall reimburse the Administrator (or its affiliates) for an allocable portion of the compensation paid by the Administrator (or its affiliates) to such individuals (based on a percentage of time such individuals devote, on an estimated basis, to the business and affairs of the Company and in acting on behalf of the Company).
From time to time, the Adviser or its affiliates may pay third-party providers of goods or services. The Company will reimburse the Adviser or such affiliates thereof for any such amounts paid on the Companys behalf.
In addition to the compensation paid to the Adviser pursuant to Paragraph 3 hereof, the Company shall reimburse the Adviser for all expenses of the Company incurred by the Adviser as well as the actual cost of goods and services used for or by the Company and obtained from entities not affiliated with the Adviser. The Adviser or its affiliates may be reimbursed for the administrative services performed by it or such affiliates on behalf of the Company pursuant to any separate administration or co-administration agreement with the Adviser; however, no reimbursement shall be permitted for services for which the Adviser is entitled to compensation by way of a separate fee. Excluded from the allowable reimbursement shall be: (A) rent or depreciation, utilities, capital equipment, and other administrative items of the Adviser; and (B) salaries, fringe benefits, travel expenses and other administrative items incurred or allocated to any Controlling Person of the Adviser. The term Controlling Person shall mean a person, whatever his or her title, who performs functions for the Adviser similar to those of (i) the chairman or other member of a board of directors, (ii) executive officers or (iii) those holding 10% or more equity interest in the Adviser, or a person having the power to direct or cause the direction of the Adviser, whether through the ownership of voting securities, by contract or otherwise.
With respect to clause (a) of the first paragraph of this Paragraph 2, the Adviser and the Company have entered into the Expense Support and Conditional Reimbursement Agreement, dated as of February 3, 2022 (the Expense Support Agreement), pursuant to which the Adviser has agreed to advance all of the Companys organization and offering expenses through the date on which the Company breaks escrow with respect to its investor subscriptions (the Escrow Release Date) for the initial offering of its Common Shares. Unless the Adviser elects to cover such expenses pursuant to the Expense Support Agreement, the Company will be obligated to reimburse the Adviser for such advanced expenses upon breaking escrow for such initial offering.
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AIFM Directive means Directive 2011/61/EU of the European Parliament and of the Council dated 8 June 2011 on Alternative Investment Fund Managers, together with Commission Delegated Regulation (EU) No 231/2013 supplementing Directive 2011/61/EU, as well as any similar or supplementary law, rule or regulation including any equivalent or similar law, rule or regulation implemented in the United Kingdom as a result of its withdrawal from the European Union, or subordinate legislation thereto, as implemented in any relevant jurisdiction.
3. Compensation of the Adviser.
The Company agrees to pay, and the Adviser agrees to accept, as compensation for the services provided by the Adviser hereunder, a management fee (Management Fee) and an incentive fee (Incentive Fee) as hereinafter set forth. The Adviser agrees to waive its Management Fee and its Investment Income Incentive Fee (as defined below) for the first six months following the Escrow Release Date and may agree to further waivers or deferments, in whole or in part, of the Management Fee and/or the Incentive Fee. See Appendix A for examples of how these fees are calculated. The Company shall make any payments due hereunder to the Adviser or to the Advisers designee as the Adviser may otherwise direct. Any portion of a deferred fee payable to the Adviser shall be deferred without interest and may be paid in any quarter prior to the termination of this Agreement as the Adviser may determine upon written notice to the Company.
(a) The Management Fee will be calculated and payable monthly in arrears at an annual rate of 1.25% of the value of the Companys net assets as of the beginning of the first calendar day of the applicable month. For purposes of this Agreement, net assets means the Companys total net assets determined on a consolidated basis in accordance with generally accepted accounting principles in the United States (GAAP).
The Management Fee for any partial month or quarter shall be appropriately prorated (upon termination of this Agreement as of the termination date).
(b) The Incentive Fee shall consist of two parts, as follows:
(i) The Investment Income Incentive Fee will be calculated and payable quarterly in arrears based on the Companys Pre-Incentive Fee Net Investment Income (as defined below) for the immediately preceding calendar quarter. The Companys Pre-Incentive Fee Net Investment Income means, as the context requires, either the dollar value of, or percentage rate of return on the value of the Companys net assets at the end of the immediate preceding quarter from, interest income, dividend income and any other income (including any other fees (other than fees for providing managerial assistance), such as commitment, origination, structuring, diligence and consulting fees or other fees that the Company receives from portfolio companies) accrued during the calendar quarter, minus the Companys operating expenses accrued for the quarter (including the Management Fee, expenses payable under the Administration Agreement, and any interest expense or fees on any credit facilities or outstanding debt and dividends paid on any issued and outstanding preferred shares, but excluding the incentive fee and any distribution and/or shareholder servicing fees). The Companys Pre-Incentive Fee Net Investment Income includes, in the
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case of investments with a deferred interest feature (such as original issue discount, debt instruments with payment-in-kind interest and zero coupon securities), accrued income that has not yet been received in cash. For the avoidance of doubt, the Pre-Incentive Fee Net Investment Income does not include any realized capital gains, realized capital losses or unrealized capital appreciation or depreciation. The impact of expense support payments and recoupments are also excluded from Pre-Incentive Fee Net Investment Income. The Pre-Incentive Fee Net Investment Income, expressed as a rate of return on the value of the Companys net assets at the end of the immediately preceding calendar quarter, will be compared to a hurdle of 1.25% per quarter (5.0% annualized) (the Hurdle Rate). The Company will pay to the Adviser an Investment Income Incentive Fee each calendar quarter as follows:
(a) | No Investment Income Incentive Fee in any calendar quarter in which the Companys Pre-Incentive Fee Net Investment Income does not exceed the Hurdle Rate; |
(b) | 100% of the amount of the Companys Pre-Incentive Fee Net Investment Income, if any, that exceeds the Hurdle Rate but is less than 1.4286% (5.714% annualized) rate of return on the value of the Companys net assets as of the end of such calendar quarter (the Catch-Up), which is intended to provide the Adviser with 12.50% of the Pre-Incentive Fee Net Investment Income as if the Hurdle Rate did not apply, if the Pre-Incentive Fee Net Investment Income exceeds the Hurdle Rate in such calendar quarter; and |
(c) | 12.5% of the amount of the Companys Pre-Incentive Fee Net Investment Income, if any, that exceeds a 1.4286% (5.714% annualized) rate of return on the value of the Companys net assets as of the end of such calendar quarter, so that once the Hurdle Rate is reached and the Catch-Up in (b) immediately above is achieved, 12.5% of the Pre-Incentive Fee Net Investment Income thereafter is allocated to the Adviser. |
The foregoing calculations will be appropriately prorated for any period of less than three months and adjusted for any issuances or repurchases of the Common Shares during a calendar quarter.
(ii) The second part of the Incentive Fee is the Capital Gains Incentive Fee, determined and payable in arrears as of the end of each fiscal year (or upon termination of this Agreement) and equals 12.5% of cumulative realized capital gains from inception through the end of such fiscal year, computed net of all realized capital losses and unrealized capital depreciation on a cumulative basis, less the aggregate amount of any previously paid incentive fee on capital gains as calculated in accordance with GAAP. Each fiscal year, the fee paid for the Capital Gains Incentive Fee is net of the aggregate amount of any previously paid capital gains incentive fee for all prior periods. The Company will accrue, but will not pay, a Capital Gains Incentive Fee with respect to unrealized appreciation because a Capital Gains Incentive Fee would be owed to the Adviser if the Company were to sell the relevant investment and realize a capital gain. In no event will the capital gains incentive fee payable pursuant to this Agreement be in excess of the amount permitted by the Advisers Act, including Section 205 thereof.
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All fees that are payable under this Agreement for any partial period will be appropriately pro-rated.
(c) In certain circumstances the Adviser, any Sub-Adviser, or any of their respective affiliates, may receive compensation from a portfolio company in connection with the Companys investment in such portfolio company. Any compensation received by the Adviser, Sub-Adviser, or any of their respective affiliates, attributable to the Companys investment in any portfolio company, in excess of any of the limitations in or exemptions granted from the Investment Company Act, any interpretation thereof by the staff of the SEC, or the conditions set forth in any exemptive relief granted to the Adviser, any Sub-Adviser or the Company by the SEC, shall be delivered promptly to the Company and the Company will retain such excess compensation for the benefit of its unitholders.
4. Covenants of the Adviser.
(a) The Adviser covenants that it will maintain its registration as an investment adviser under the Advisers Act. The Adviser agrees that its activities will at all times be in compliance in all material respects with all applicable federal and state laws governing its operations and investments.
(b) The Adviser shall prepare or shall cause to be prepared and distributed to shareholders during each year the following reports of the Company (either included in a periodic report filed with the SEC or distributed in a separate report) (i) within sixty (60) days of the end of each quarter, a report containing the same financial information contained in the Companys Quarterly Report on Form 10-Q filed by the Company under the Exchange Act and (ii) within one hundred and twenty (120) days after the end of the Companys fiscal year, (a) an annual report that shall include financial statements prepared in accordance with U.S. GAAP which are audited and reported on by independent certified public accountants; (b) a report of the material activities of the Company during the period covered by the report; (c) where forecasts have been provided to the Companys shareholders, a table comparing the forecasts previously provided with the actual results during the period covered by the report; and (d) a report setting forth distributions to the Companys shareholders for the period covered thereby and separately identifying distributions from: (A) cash flow from operations during the period; (B) cash flow from operations during a prior period which have been held as reserves; (C) proceeds from disposition of assets; and (D) reserves from the gross proceeds of the Companys offering.
(c) From time to time and not less than quarterly, the Company shall cause the Adviser to review the Companys accounts to determine whether cash distributions are appropriate. The Company may, subject to authorization by the Board, distribute pro rata to the Companys shareholders funds which the Board deems unnecessary to retain in the Company. The Board may from time to time authorize the Company to declare and pay to the Companys shareholders such dividends or other distributions, in cash or other assets of the Company or in securities of the Company, including in shares of one class or series payable to the holders of the shares of another class or series, or from any other source as the Board in its discretion shall determine. Any such
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cash distributions to the Adviser shall be made only in conjunction with distributions to shareholders and only out of funds properly allocated to the Advisers account. All such cash distributions shall be made only out of funds legally available therefor pursuant to the Delaware General Corporation Law, as amended from time to time.
(d) The Adviser shall, in its sole discretion, temporarily place proceeds from offerings by the Company of its equity securities into short-term, highly liquid investments which, in its reasonable judgment, afford appropriate safety of principal during such time as it is determining the composition and allocation of the portfolio of the Company and the nature, timing and implementation of any changes thereto pursuant to Paragraph 1 of this Agreement; provided however, that the Adviser shall be under no fiduciary obligation to select any such short-term, highly liquid investment based solely on any yield or return of such investment. The Adviser shall cause any proceeds of the offering of Company securities not committed for investment within the later of two years from the date of effectiveness of the Companys Registration Statement on Form N-2 (File No. 333-261775) or one year from termination of the offering, unless a longer period is permitted by the applicable State Administrator, to be paid as a distribution to the shareholders of the Company as a return of capital without deduction of a sales load.
5. Brokerage Commissions.
(a) The Adviser is hereby authorized, to the fullest extent now or hereafter permitted by law, to cause the Company to pay a member of a national securities exchange, broker or dealer an amount of commission for effecting a securities transaction in excess of the amount of commission another member of such exchange, broker or dealer would have charged for effecting that transaction, if the Adviser determines in good faith, taking into account such factors as price (including the applicable brokerage commission or dealer spread), size of order, difficulty of execution, and operational facilities of the firm and the firms risk and skill in positioning blocks of securities, that such amount of commission is reasonable in relation to the value of the brokerage and/or research services provided by such member, broker or dealer, viewed in terms of either that particular transaction or its overall responsibilities with respect to the Companys portfolio, and constitutes the best net results for the Company.
(b) All Front End Fees (as defined in the Declaration of Trust) shall be reasonable and shall not exceed eighteen percent (18%) of the gross proceeds of any offering, regardless of the source of payment and the percentage of gross proceeds of any offering committed to investment shall be at least eighty-two percent (82%). All items of compensation to underwriters or dealers, including, but not limited to, selling commissions, expenses, rights of first refusal, consulting fees, finders fees and all other items of compensation of any kind or description paid by the Company, directly or indirectly, shall be taken into consideration in computing the amount of allowable Front End Fees.
6. Other Activities of the Adviser.
The services of the Adviser to the Company are not exclusive. Subject to the provisions of the Companys Declaration of Trust, the Adviser and its managers, partners, principals, officers, employees and agents shall be free to act for their own account or the account of any other person, and to engage in any other business or render similar or different services to others including,
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without limitation, the direct or indirect sponsorship or management of other investment based accounts or commingled pools of capital, however structured, having investment objectives similar to those of the Company, so long as the Advisers services to the Company hereunder are not impaired thereby. The Company agrees that the Adviser may give advice and take action in the performance of its duties with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the investments of the Company. Nothing in this Agreement shall limit or restrict the right of any manager, partner, principal, officer, employee or agent of the Adviser to engage in any other business or to devote his or her time and attention in part to any other business, whether of a similar or dissimilar nature, or to receive any fees or compensation in connection therewith (including fees for serving as a director of, or providing consulting services to, one or more of the Companys portfolio companies, subject to applicable law). So long as this Agreement or any extension, renewal or amendment remains in effect, the Adviser shall be the only investment adviser for the Company, subject to the Advisers right to enter into sub-advisory agreements. The Adviser assumes no responsibility under this Agreement other than to render the services called for hereunder. It is understood that trustees, managers, officers, employees and shareholders of the Company are or may become interested in the Adviser and its affiliates, as directors, officers, employees, partners, principals, stockholders, members, managers, agents or otherwise, and that the Adviser and directors, officers, employees, partners, principals, stockholders, members, managers and agents of the Adviser and its affiliates are or may become similarly interested in the Company as shareholders or otherwise.
7. Responsibility of Dual Trustees, Officers and/or Employees.
If any person who is a manager, partner, principal, officer, employee or agent of the Adviser is or becomes a trustee, manager, officer and/or employee of the Company and acts as such in any business of the Company, then such manager, partner, principal, officer, employee and/or agent of the Adviser shall be deemed to be acting in such capacity solely for the Company, and not as a manager, partner, principal, officer, employee or agent of the Adviser or under the control or direction of the Adviser, even if paid by the Adviser.
8. Limitation of Liability of the Adviser; Indemnification.
(a) The Adviser (and its officers, managers, partners, members (and their members, including the owners of their members), agents, employees, controlling persons and any other person or entity affiliated with the Adviser) shall not be liable to the Company for any action taken or omitted to be taken by the Adviser in connection with the performance of any of its duties or obligations under this Agreement or otherwise as an investment adviser of the Company (except to the extent specified in Section 36(b) of the Investment Company Act concerning loss resulting from a breach of fiduciary duty (as the same is finally determined by judicial proceedings) with respect to the receipt of compensation for services), and the Company shall indemnify, defend and protect the Adviser (and its officers, managers, partners, members (and their members, including the owners of their members), agents, employees, controlling persons and any other person or entity affiliated with the Adviser, each of whom shall be deemed a third party beneficiary hereof) (collectively, the Indemnified Parties) and hold them harmless from and against all damages, liabilities, costs and expenses (including reasonable attorneys fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the
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right of the Company or its security holders) arising out of or otherwise based upon the performance of any of the Advisers duties or obligations under this Agreement or otherwise as an investment adviser of the Company. Notwithstanding the preceding sentence of this Paragraph 8 to the contrary, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Company or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Advisers duties or by reason of the reckless disregard of the Advisers duties and obligations under this Agreement.
The following provisions in Paragraph 8(b)-(c) shall not apply in respect of Brookfield Oaktree Wealth Solutions LLC.
(b) Notwithstanding Paragraph 8(a) to the contrary, the Company shall not provide for indemnification of an Indemnified Party for any liability or loss suffered by an Indemnified Party, nor shall the Company provide that any of the Indemnified Parties be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met: (i) the Company has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company; (ii) the Company has determined, in good faith, that the Indemnified Party was acting on behalf of or performing services for the Company; (iii) the Company has determined, in good faith, that such liability or loss was not the result of (A) negligence or misconduct, in the case that the Indemnified Party is the Adviser or an Affiliate (as defined in the Declaration of Trust) of the Adviser, or (B) gross negligence or willful misconduct, in the case that the Indemnified Party is a director of the Company who is not also an officer of the Company or the Adviser or an Affiliate of the Adviser; and (iv) such indemnification or agreement to hold harmless is recoverable only out of the Companys net assets and not from the Company shareholders.
Furthermore, the Indemnified Party shall not be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (A) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the Indemnified Party; (B) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnified Party; or (C) a court of competent jurisdiction approves a settlement of the claims against the Indemnified Party and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which Common Shares were offered or sold as to indemnification for violations of securities laws.
(c) The Company may pay or reimburse reasonable legal expenses and other costs incurred by the Indemnified Party in advance of final disposition of a proceeding only if all of the following are satisfied: (i) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company; (ii) the Indemnified Party provides the Company with written affirmation of such Indemnified Partys good faith belief that the Indemnified Party has met the standard of conduct necessary for indemnification by the Company; (iii) the legal proceeding was initiated by a third party who is not a Company shareholder, or, if by a Company
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shareholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and (iv) the Indemnified Party provides the Company with a written agreement to repay the amount paid or reimbursed by the Company, together with the applicable legal rate of interest thereon, if it is ultimately determined that the Indemnified Party did not comply with the requisite standard of conduct and is not entitled to indemnification.
9. Effectiveness, Duration and Termination of Agreement.
(a) This Agreement shall become effective as of the Effective Date. This Agreement shall remain in effect for two years from the Effective Date, and thereafter shall continue automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (i) the vote of the Board or a majority of the outstanding voting securities of the Company and (ii) the vote of a majority of the Companys trustees who are not parties to this Agreement or interested persons (as such term is defined in Section 2(a)(19) of the Investment Company Act) of any such party, in accordance with the requirements of the Investment Company Act. This Agreement may be terminated at any time, without the payment of any penalty, (1) upon 60 days written notice, by the vote of a majority of the outstanding voting securities of the Company, or by the vote of a majority of the Companys trustees, or (2) upon 120 days written notice, by the Adviser. This Agreement shall automatically terminate in the event of its assignment (as such term is defined for purposes of Section 15(a)(4) of the Investment Company Act). Further, notwithstanding the termination or expiration of this Agreement as aforesaid, the Adviser shall be entitled to any amounts owed under Paragraph 3 through the date of termination or expiration.
(b) After the termination of this Agreement, the Adviser shall not be entitled to compensation for further services provided hereunder, except that it shall be entitled to receive from the Company within 30 days after the effective date of such termination all unpaid reimbursements and all earned but unpaid fees payable to the Adviser prior to termination of this Agreement, including any deferred fees. The Adviser shall promptly upon termination: (i) deliver to the Board a full accounting, including a statement showing all payments collected by it and a statement of all money held by it, covering the period following the date of the last accounting furnished to the Board; (ii) deliver to the Board all assets and documents of the Company then in custody of the Adviser; and (iii) cooperate with the Company to provide an orderly management transition.
(c) Without the approval of holders of a majority of the Common Shares entitled to vote on the matter, or such other approval as may be required under the mandatory provisions of any applicable laws or regulations, or other provisions of the Declaration of Trust, the Adviser shall not: (i) modify this Agreement except for amendments that do not adversely affect the rights of the shareholders; (ii) appoint a new Adviser (other than a sub-adviser pursuant to the terms of this Agreement and applicable law); (iii) sell all or substantially all of the Companys assets other than in the ordinary course of the Companys business or as otherwise permitted by law; or (iv) except as otherwise permitted herein, voluntarily withdraw as the Adviser unless such withdrawal would not affect the tax status of the Company and would not materially adversely affect the shareholders.
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(d) The Company may terminate the Advisers interest in the Companys revenues, expenses, income, losses, distributions and capital by payment of an amount equal to the then present fair market value of the terminated Advisers interest, determined by agreement of the terminated Adviser and the Company. If the Company and the Adviser cannot agree upon such amount, the parties will submit to binding arbitration which cost will be borne equally by the Adviser and the Company. The method of payment to the terminated Adviser must be fair and must protect the solvency and liquidity of the Company.
10. Conflicts of Interest and Prohibited Activities
(a) The Adviser is not hereby granted or entitled to an exclusive right to sell or exclusive employment to sell assets for the Company.
(b) The Adviser shall not: (i) receive or accept any rebate, give-up or similar arrangement that is prohibited under applicable federal or state securities laws or under the North American Securities Administrators Associations Omnibus Guidelines Statement of Policy (the Omnibus Guidelines); (ii) participate in any reciprocal business arrangement that would circumvent (A) provisions of applicable federal or state securities laws governing conflicts of interest or investment restrictions or (B) the Omnibus Guidelines; (iii) enter into any agreement, arrangement or understanding that would circumvent the restrictions against dealing with affiliates or promoters under applicable federal or state securities laws or under the Omnibus Guidelines; or (iv) enter into any agreement, arrangement or understanding that would circumvent Section V.G of the Omnibus Guidelines.
(c) The Adviser shall not directly or indirectly pay or award any fees or commissions or other compensation to any person engaged to sell Common Shares or give investment advice to a potential shareholder; provided, however, that this subsection shall not prohibit the payment to a registered broker-dealer or other properly licensed agent of normal sales commissions or other compensation (including cash compensation and non-cash compensation (as such terms are defined under FINRA Rule 2310)) for selling or distributing Common Shares, including out of the Advisers own assets, including those amounts paid to the Adviser under this Agreement.
(d) The Adviser covenants that it shall not permit or cause to be permitted the Companys funds to be commingled with the funds of any other person and the funds will be protected from the claims of affiliated companies.
11. Access to Shareholder List.
If a shareholder requests a copy of the Shareholder List pursuant to Section 11.3 of the Companys Declaration of Trust or any successor provision thereto (the Shareholder List Provision), the Adviser is hereby authorized to request a copy of the Shareholder List from the Companys transfer agent and send a copy of the Shareholder List to any shareholder so requesting in accordance with the Shareholder List Provision. The Adviser and the Board shall be liable to any shareholder requesting the list for the costs, including attorneys fees, incurred by that shareholder for compelling the production of the Shareholder List, and for actual damages suffered by any shareholder by reason of such refusal or neglect. It shall be a defense that the actual purpose and reason for the requests for inspection or for a copy of the Shareholder List is to secure such list of shareholder or other information for the purpose of selling such list or copies thereof, or of using the same for a commercial purpose other than in the interest of the applicant as a shareholder relative to the affairs of the Company.
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12. Notices.
Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage prepaid, to the other party at its principal office.
13. Amendments.
This Agreement may be amended by mutual consent.
14. Entire Agreement; Governing Law.
This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof. Notwithstanding the place where this Agreement may be executed by any of the parties hereto, this Agreement shall be construed in accordance with the laws of the State of New York. For so long as the Company is regulated as a BDC under the Investment Company Act, this Agreement shall also be construed in accordance with the applicable provisions of the Investment Company Act. In such case, to the extent the applicable laws of the State of New York, or any of the provisions herein, conflict with the provisions of the Investment Company Act, the latter shall control. To the fullest extent permitted by law, in the event of any dispute arising out of the terms and conditions of this Agreement, the parties hereto consent and submit to the jurisdiction of the courts of the State of New York in the county of New York and of the U.S. District Court for the Southern District of New York.
15. Forum Selection.
Any legal action or proceeding with respect to this Agreement or the services provided hereunder or for recognition and enforcement of any judgment in respect hereof brought by the other party hereto or its successors or assigns must be brought and determined in the state or United States district courts of the State of New York (and may not be brought or determined in any other forum or jurisdiction), and each party hereto submits with regard to any action or proceeding for itself and in respect of its property, generally and unconditionally, to the sole and exclusive jurisdiction of the aforesaid courts.
16. No Third Party Beneficiary.
Other than expressly provided for in Paragraph 8 of this Agreement, this Agreement does not and is not intended to confer any rights or remedies upon any person other than the parties to this Agreement; there are no third-party beneficiaries of this Agreement, including but not limited to shareholders of the Company.
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17. Severability.
Every term and provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such term or provision will be enforced to the maximum extent permitted by law and, in any event, such illegality or invalidity shall not affect the validity of the remainder of this Agreement.
18. Counterparts.
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall constitute a single agreement.
19. Survival of Certain Provisions.
The provisions of Paragraph 8 of this Agreement shall survive any termination or expiration of this Agreement and the dissolution, termination and winding up of the Company.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed on the date above written.
OAKTREE STRATEGIC CREDIT FUND | ||
By: | /s/ Mary Gallegly | |
Name: | Mary Gallegly | |
Title: | General Counsel and Secretary |
OAKTREE FUND ADVISORS, LLC | ||
By: | /s/ Mary Gallegly | |
Name: | Mary Gallegly | |
Title: | Managing Director | |
By: | /s/ Matthew Stewart | |
Name: | Matthew Stewart | |
Title: | Senior Vice President |
[Signature Page to Oaktree Strategic Credit Fund A&R Investment Advisory Agreement]
Appendix A
Example 1: Income Related Portion of Incentive Fee(1):
Alternative 1Assumptions
Investment income (including interest, dividends, fees, etc.) = 1.25%.
Hurdle Rate(2) = 1.25%.
Management Fee(3) = 0.3125%.
Other expenses (legal, accounting, custodian, transfer agent, etc.)(4) = 0.25%.
Pre-Incentive Fee Net Investment Income =
(investment income (Management Fee + other expenses)) = 0.6875%.
Pre-Incentive Net Investment Income does not exceed Hurdle Rate, therefore there is no Investment Income Incentive Fee.
Alternative 2Assumptions
Investment income (including interest, dividends, fees, etc.) = 1.90%.
Hurdle Rate(2) = 1.25%.
Management Fee(3) = 0.3125%.
Other expenses (legal, accounting, custodian, transfer agent, etc.)(4) = 0.25%.
Pre-Incentive Fee Net Investment Income =
(investment income (Management Fee + other expenses)) = 1.3375%
Catch-Up = 1.3375% 1.25% =0.0875%
Incentive Fee = 100% × (1.3375% 1.25%) = 0.0875%.
Alternative 3Assumptions
Investment income (including interest, dividends, fees, etc.) = 2.50%.
Hurdle Rate(2) = 1.25%.
Management Fee(3) = 0.3125%.
Other expenses (legal, accounting, custodian, transfer agent, etc.)(4) = 0.25%.
Pre-Incentive Fee Net Investment Income =
(investment income (Management Fee + other expenses)) = 1.9375%.
Incentive Fee = 12.5% × Pre-Incentive Fee Net Investment Income, subject to catch-up (5).
Incentive Fee = (100% × catch-up) + (12.5% × (Pre-Incentive Fee Net Investment Income 1.4286%)).
Catch-Up = 1.4286% 1.25% = 0.1786%.
Incentive Fee = (100% × 0.1786%) + (12.5% × (1.9375% 1.4286%))
= 0.1786% + (12.5% × 0.5089%)
= 0.1786% + 0.0636%
= 0.2422%.
Example 2: Capital Gains Portion of Incentive Fee:
Alternative 1Assumptions
| Year 1: $20 million investment made in Company A (Investment A), and $30 million investment made in Company B (Investment B). |
| Year 2: Investment A sold for $50 million and fair market value (FMV) of Investment B determined to be $32 million. |
| Year 3: FMV of Investment B determined to be $25 million. |
| Year 4: Investment B sold for $31 million. |
The Capital Gains Incentive Fee, if any, would be:
Year 1: None.
Year 2: $3.75 million Capital Gains Incentive Fee, calculated as follows: $30 million realized capital gains on sale of Investment A multiplied by 12.5%.
Year 3: None; calculated as follows:(6) $3.125 million cumulative fee (12.5% multiplied by $25 million ($30 million cumulative capital gains less $5 million cumulative unrealized capital depreciation)) less $3.75 million (previous capital gains fee paid in Year 2).
Year 4: $125,000 Capital Gains Incentive Fee, calculated as follows: $3.875 million cumulative fee (12.5% multiplied by $31 million cumulative realized capital gains ($30 million from Investment A and $1 million from Investment B)) less $3.75 million (previous capital gains fee paid in Year 2).
Alternative 2Assumptions
| Year 1: $20 million investment made in Company A (Investment A), $30 million investment made in Company B (Investment B) and $25 million investment made in Company C (Investment C). |
| Year 2: Investment A sold for $50 million, FMV of Investment B determined to be $25 million and FMV of Investment C determined to be $25 million. |
| Year 3: FMV of Investment B determined to be $27 million and Investment C sold for $30 million. |
| Year 4: FMV of Investment B determined to be $35 million. |
| Year 5: Investment B sold for $20 million. |
The capital gains portion of the incentive fee, if any, would be:
| Year 1: None. |
| Year 2: $3.125 million Capital Gains Incentive Fee, calculated as follows: 12.5% multiplied by $25 million ($30 million realized capital gains on sale of Investment A less $5 million unrealized capital depreciation on Investment B). |
| Year 3: $875,000 Capital Gains Incentive Fee, calculated as follows: $4 million cumulative fee (12.5% multiplied by $32 million ($35 million cumulative realized capital gains less $3 million cumulative unrealized capital depreciation)) less $3.125 million (previous capital gains fee paid in Year 2). |
| Year 4: $375,000 capital gains incentive fee, calculated as follows: $4.375 million cumulative fee (12.5% multiplied by $35 million cumulative realized capital gains) less $4 million (previous cumulative capital gains fee paid in Year 2 and Year 3). |
| Year 5: None. $3.125 million cumulative fee (12.5% multiplied by $25 million ($35 million cumulative realized capital gains less $10 million realized capital losses)) less $4.375 million (previous cumulative capital gains fee paid in Years 2, 3 and 4). |
Notes:
1. | The hypothetical amount of Pre-Incentive Fee Net Investment Income shown is expressed as a rate of return as of the beginning and the end of the immediately preceding calendar quarter. Solely for purposes of these illustrative examples, it has been assumed that the Company has not incurred any leverage. However, the Company expects to use leverage to partially finance its investments. |
2. | Represents 5.0% annualized Hurdle Rate. |
3. | Represents 1.25% annualized Management Fee. |
4. | Hypothetical other expenses. Excludes organizational and offering expenses. |
5. | The catch-up provision is intended to provide the Adviser with an Incentive Fee of approximately 12.5% on all of the Pre-Incentive Fee Net Investment Income as if a Hurdle Rate did not apply when the net investment income exceeds 1.43% in any calendar quarter. |
Exhibit (j)(2)
CUSTODY AGREEMENT
This Agreement is made as of by and between Oaktree Strategic Credit Fund, a statutory trust organized under the laws of the State of Delaware with its principal place of business located in Los Angeles, California (the Company) and UMB Bank, N.A., a national banking association with its principal place of business located in Kansas City, Missouri (the Custodian).
WITNESSETH:
WHEREAS, the Company desires for the Custodian to provide certain custodial services relating to securities and other assets of the Company for the purposes of processing investor subscriptions and repurchases, which shall be limited to receiving, temporarily holding and disbursing Company cash in connection therewith; and
WHEREAS, the Custodian is willing to provide the services upon the terms contained in this Agreement;
SECTION l . APPOINTMENT OF CUSTODIAN
SECTION 1.1 The Company hereby appoints the Custodian as a custodian of Assets (as defined below) belonging to the Company, which have been or may be from time to time delivered to and accepted by the Custodian. Custodian accepts such appointment as a custodian and agrees to perform the duties and responsibilities of Custodian as set forth herein on the conditions set forth herein. For purposes of this Agreement, the term Assets shall be limited to cash in United States dollars held by the Custodian for the benefit of the Company or payment instruments able to be processed through the Federal Reserve System as cash items. The Assets are to be held in an account titled DST Systems, Inc. as Agent for Oaktree Strategic Credit Fund or a close approximation thereto.
SECTION 2. REPRESENTATIONS AND WARRANTIES
SECTION 2.1 The Company hereby represents, warrants and acknowledges to the Custodian:
A. | That the Company is duly organized and existing in good standing under the laws of the State of Delaware that has elected to be regulated as a business development company under the Investment Company Act of 1940, as amended (the 1940 Act); and |
Oaktree Strategic Credit Fund Custody Agreement - Page 1
B. | That the Company has the requisite power and authority to enter into and perform this Agreement; and |
C. | That the Company has taken all requisite action necessary to appoint the Custodian as a custodian, that this Agreement has been duly executed and delivered; and that this Agreement constitutes a legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except that such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors rights generally, and general principles of equity. |
SECTION 2.2 The Custodian hereby represents, warrants and acknowledges to the Company:
A. | That the Custodian is a national banking association duly organized and existing under the National Bank Act and is qualified to serve as a custodian to the Company under the provisions of the 1940 Act; and |
B. | That the Custodian has the requisite power and authority under applicable law, its charter and its bylaws to enter into and perform this Agreement; that this Agreement has been duly executed and delivered to the Custodian; and that this Agreement constitutes a legal, valid and binding obligation of the Custodian, enforceable in accordance with its terms, except that such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors rights generally, and general principles of equity. |
SECTION 3. DUTIES AND RESPONSIBILITIES OF THE PARTIES
SECTION 3.1 DELIVERY OF ASSETS. The Company shall cause, either directly or through the Companys transfer agent, DST Systems, Inc. (DST), or the Companys primary custodian, The Bank of New York Mellon (BNYM) to be delivered to the Custodian from time to time such Assets conforming to Section 1.1 of this Agreement as the Company determines.
SECTION 3.2. DELIVERY OF ACCOUNTS AND RECORDS. The Company shall turn over, either directly or through DST or BNYM, to the Custodian such accounts and records needed by the Custodian to perform its duties and responsibilities hereunder fully and properly. This shall include charter documents, by-laws, resolutions, registration statements, W-9s and other tax- related documentation, compliance policies and procedures and other compliance documents.
SECTION 3.3 DELIVERY OF ASSETS TO THIRD PARTIES. The Custodian shall receive delivery of and keep safely the Assets of the Company segregated in a separate account. The Custodian shall not deliver, assign, pledge or hypothecate any such Assets to any person except as permitted by the provisions hereof. Custodian is permitted to deliver the Assets to the
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Company, or to BNYM or other third parties at DSTs instruction pursuant to the terms of the UMB Treasury Management Services Master Agreement dated May 22, 2008, among DST, the Custodian and various Customers (as defined therein), and the applicable Service Exhibits thereto, as in effect on the date hereof (collectively, the Master Agreement). The Custodian is responsible for the safekeeping of the Assets only until they have been transmitted to other persons as permitted under the terms hereof.
SECTION 3.4 DEPOSIT ACCOUNTS. The Custodian shall open and maintain upon the terms of a deposit account agreement a separate deposit account or accounts in the United States in the name of the Company, or DST as Companys agent on behalf of the Company, subject only to draft or order by DST or the Custodian acting pursuant to the terms of this Agreement or the Master Agreement. The Custodian shall credit to the deposit account or accounts, subject to the provisions hereof, all cash received by the Custodian from or for the account of the Company. Funds held by the Custodian for the Company may be deposited by the Custodian to its credit as Custodian in the banking department of the Custodian or in such other banks or trust companies as it may in its discretion deem necessary or desirable. The funds shall be deposited by the Custodian in its capacity as Custodian and shall be withdrawable by the Custodian or by DST as Customers agent only in such capacity.
SECTION 3.5 DAILY STATEMENT OF ACCOUNTS. The Custodian shall, within a reasonable time, render to Company, DST and/or BNYM a detailed statement of the amounts received or paid and of Assets received or delivered for the account of the Company during each business day. The Custodian shall maintain such books and records as are necessary to enable it to render, from time to time upon request by Company, DST and/or BNYM, a detailed statement of the Assets. The Custodian shall permit such persons as are authorized by the Company, including the Companys independent registered public accountants, reasonable access to such books and records or shall provide reasonable confirmation of the contents of such books and records. Access to such book and records in electronic format through Custodians systems shall be subject to the terms of the Master Agreement.
SECTION 3.6 ACCOUNTS AND RECORDS. The Custodian shall maintain complete and accurate records with respect to Assets held for the account of the Company as required by the rules and regulations of the Securities and Exchange Commission (SEC) applicable to business development companies regulated under the 1940 Act. All such books and records maintained by the Custodian shall be maintained in compliance with the rules and regulations of the SEC, including, but not limited to, books and records required to be maintained by Section 31 (a) and Section 64 of the 1940 Act and the rules and regulations from time to time adopted thereunder. The Company shall promptly notify the Custodian if it believes that the Custodian is not maintaining such records in accordance therewith.
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SECTION 3.7 ACCOUNTS AND RECORDS PROPERTY OF COMPANY. The Custodian acknowledges that all of the accounts and records maintained by the Custodian pursuant hereto are the property of the Company, and shall be made available to the Company for inspection or reproduction within a reasonable period of time, upon demand. The Custodian shall assist the Companys independent registered public accountants, or upon the Companys approval, or demand, any regulatory body, in any requested review of the Companys accounts and records, but the Company shall reimburse the Custodian for all expenses and employee time invested in any such review outside of routine and normal periodic reviews. Upon receipt from the Company of the necessary information or instructions, the Custodian shall supply information, to the extent available and provided in the normal course by the Custodian in similar circumstances, from the books and records it maintains for the Company that it needs for tax returns, questionnaires, periodic reports to shareholders and such other reports and information requests as the Company and the Custodian agree upon from time to time. The Company shall reimburse the Custodian for all expenses and employee time invested in supplying such information that is outside the routine and normal recordkeeping and reports normally prepared and/or maintained by Custodian for its commercial clients.
SECTION 4. INSTRUCTIONS
SECTION 4.1. An Instruction as used herein, shall mean a request, direction, instruction or certification initiated by the Company or DST and conforming to the terms of this paragraph. An Instruction may be transmitted to the Custodian by any of the following means:
A. | A writing manually signed on behalf of the Company by an Authorized Person (as hereinafter defined in Section 4.6); |
B. | A telephonic or other oral communication from a person the Custodian reasonably believes to be an Authorized Person; |
C. | A communication effected through the internet or web-based functionality (including without limitation, emails, data files and other communications) on behalf of the Company that the Custodian reasonably believes has been signed or otherwise originated by an Authorized Person (Electronic Communication); or |
D. | Other means reasonably acceptable to the parties. |
SECTION 4.2. Any Instruction that requests a transfer of funds in the form of a wire, ACH transmission or other electronic means shall be subject to the further requirements of the Master Agreement, including compliance with applicable security procedures. The Company may require review and approval of appropriate documentation prior to the initiation of any transfer of funds, including checks. Subject to the foregoing: Instructions in the form of telephonic or other oral communications shall be confirmed by the Company or DST by either a writing (as set forth in Section 4.1.A above), or an Electronic Communication (as set forth in Section 4.1.C above), but the lack of such confirmation shall in no way affect any action taken by the Custodian in reliance
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upon such telephonic or other oral Instructions prior to the Custodians receipt of such confirmation. The Company and DST authorize the Custodian to record any and all telephonic or other oral Instructions communicated to the Custodian. The parties acknowledge and agree that, with respect to Instructions transmitted by an Electronic Communication, the Custodian cannot verify that the Electronic Communication has been initiated by an Authorized Person; accordingly, the Custodian shall have no liability as a result of actions taken in reliance on unauthorized Electronic Communication Instructions. The Custodian recommends that any Instructions transmitted by the Company or DST via email be done through a secure system or process.
SECTION 4.3 An Authorized Person shall be responsible for assuring the accuracy and completeness of Instructions. If the Custodian reasonably determines that an Instruction is unclear or incomplete, the Custodian may notify the Company or DST of such determination, in which case the Company or DST shall be responsible for delivering to the Custodian an amended Instruction. The Custodian shall have no obligation to (i) take any action until the Company or DST re-delivers to the Custodian an Instruction that is clear and complete or (ii) comply with an Instruction that does not comply with the terms of the Master Agreement.
SECTION 4.4. Instructions shall be delivered to the Custodian at the address, telephone or email address agreed upon from time to time by each of the Custodian, the Company and DST.
SECTION 4.5. The Company or DST shall be responsible for delivering Instructions to the Custodian in a timely manner, after considering such factors as the involvement of other custodians, brokers or agents in a transaction, time zone differences reasonable industry standards, etc. The Custodian shall have no liability if the Company or DST delivers Instructions to the Custodian after any deadline established by the Custodian and agreed to by the Company and DST.
SECTION 4.6. The Company shall cause to be delivered to the Custodian copies of the resolution(s) of the Company and such documentation from DST as may be required from the Custodian, and all amendments or supplements thereto, properly certified or authenticated, designating certain individuals that are authorized to give the Custodian Instructions in the name and on behalf of the Company (collectively, the Authorized Persons). The Custodian may accept and rely upon these documents as conclusive evidence of the facts set forth therein and shall be considered to be in full force and effect until delivery to the Custodian of similar documents to the contrary. Upon delivery of a document which deletes or does not include the name(s) of a person previously authorized to give Instructions, such person shall no longer be considered an Authorized Person; provided that the Custodian will have until the following business day to process any such change in Authorized Persons; and any such document must be delivered in accordance with Section 4.4 hereof.
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SECTION 5. LIMITATION OF LIABILITY
SECTION 5.1. The Custodian shall at all times use reasonable care and due diligence and act in good faith in performing its duties under this Agreement.
SECTION 5.2. The Custodian is not responsible for, and the Company shall indemnify and hold the Custodian harmless from and against, any and all costs, expenses, losses, damages, charges, counsel fees, payments and liabilities which may be asserted against or incurred by the Custodian for which the Custodian may be held to be liable, arising out of or attributable to:
A. | the Custodians action or omission to act pursuant to this Agreement; provided that the Custodian has acted or omitted to act in good faith and with due diligence and reasonable care; and provided further, that neither party is liable to the other for consequential, special, or punitive damages in any event; |
B. | the Custodians action or omission to act in reasonable reliance upon any Instruction, advice, notice, request, consent, certificate or other instrument or paper appearing to it to be genuine and to have been properly executed and which is otherwise in compliance with the terms of this Agreement; |
C. | the Companys refusal or failure to comply with the terms of this Agreement, or the Companys gross negligence, willful misconduct or bad faith, or the failure of any representation or warranty of the Company in this Agreement to remain true and correct in all respects at all times; |
D. | any money represented by any check, draft, wire transfer, clearinghouse funds, uncollected funds, or instrument for the payment of money to be received by the Custodian on behalf of the Company until actually received; provided, however, that the Custodian shall advise the Company or DST promptly if it fails to receive any such money in the ordinary course of business and shall cooperate with the Company toward the end that such money is received; or |
E. | any actions taken or omitted by Custodian in good faith reliance on the advice of Company or DST and upon statements of the Companys or DSTs personnel believed by the Custodian to be Authorized Persons acting on behalf of such entity. |
SECTION 6. COMPENSATION
SECTION 6.1. The Custodian will not be entitled to any compensation from the Company under this Agreement.
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SECTION 7. TERM AND TERMINATION
SECTION 7.1 The initial term of this Agreement is for a period of one (1) year, or for such period as Custodian is providing services for Company under the Master Agreement, whichever is longer. The Company or the Custodian may terminate the same by notice in writing, delivered or mailed, postage prepaid, to the other party and received not less than sixty (60) days prior to the date upon which such termination will take effect. Upon termination hereof, the Custodian shall deliver (i) all accounts, books and records to the Company; and (ii) all Assets, duly endorsed and in form for transfer, to a successor custodian designated by the Company or BNYM. Upon such delivery, the Custodian will have no further obligations or liabilities under this Agreement except as to the final resolution of matters relating to activity occurring prior to the effective date of termination.
SECTION 8. NOTICES
SECTION 8.1 Notices, requests, instructions and other writings addressed to the Company at 333 South Grand Avenue, 28th Floor, Los Angeles, CA 90071, Attn: Mary Gallegly, or at such other address as the Company may have designated to the Custodian in writing, will be deemed to have been properly given to the Company pursuant to this Agreement. Notices, requests, Instructions and other writings addressed to the Custodian at 928 Grand Boulevard, Mail Stop 1011002, Kansas City, MO 64106, Attn: James Cornelius, President, Institutional Banking, or to such other address as the Custodian may have designated to the Company in writing, will be deemed to have been properly given to the Custodian pursuant to this Agreement; provided, however, that procedures for the delivery of Instructions shall be governed by Section 4 hereof.
SECTION 9. CONFIDENTIALITY
SECTION 9.1 The parties agree that all information, books and records provided by the Custodian or the Company in connection with this Agreement, and all information provided by either party pertaining to its business or operations, is Confidential Information. All Confidential Information shall be used by the party receiving such information only for the purpose of providing or obtaining services under this Agreement and, except as may be required to carry out the terms of this Agreement, shall not be disclosed to any other party without the express written consent of the party providing such Confidential Information. The foregoing limitations shall not apply to any information that is available to the general public other than as a result of a breach of this Agreement, or that is required to be disclosed by or to any entity having regulatory authority over a party hereto or any auditor of a party hereto or that is required to be disclosed as a result of a subpoena or other judicial process, or otherwise by applicable laws.
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SECTION 10. ANTI-MONEY LAUNDERING COMPLIANCE
SECTION 10.1. The Company represents and warrants that the Company has established and maintains policies and procedures reasonably designed to meet the requirements imposed by the USA PATRIOT Act, including policies and procedures designed to detect and prevent money laundering, including those required by the USA PATRIOT Act (the AML Program). The Company agrees to provide to the Custodian, from time to time upon the reasonable request of the Custodian, certification confirming that the AML Program continues to be in effect. The Company acknowledges that, because the Custodian will not have information regarding the shareholders of the Company, the Company shall assume responsibility for customer identification and verification and other customer identification program requirements in regard to such shareholders.
SECTION 11. MISCELLANEOUS
SECTION 11.1. This Agreement will be construed according to, and the rights and liabilities of the parties hereto will be governed by, the laws of the State of Missouri without reference to the choice of laws principles thereof.
SECTION 11.2. All terms and provisions hereof will be binding upon, inure to the benefit of and be enforceable by the parties hereto and their respective successors and permitted assigns.
SECTION 11.3. The representations and warranties, the indemnifications extended hereunder, and the provisions of Sections 2, 5, 9 and 10 hereof are intended to and will continue after and survive the expiration, termination or cancellation hereof.
SECTION 11.4. No provisions hereof may be amended or modified in any manner except by a written agreement properly authorized and executed by each party hereto.
SECTION 11.5. The failure of any party to insist upon the performance of any terms or conditions hereof or to enforce any rights resulting from any breach of any of the terms or conditions hereof, including the payment of damages, will not be construed as a continuing or permanent waiver of any such terms, conditions, rights or privileges, but the same will continue and remain in full force and effect as if no such forbearance or waiver had occurred. No waiver, release or discharge of any partys rights hereunder will be effective unless contained in a written instrument signed by the party sought to be charged.
SECTION 11.6. The captions herein are included for convenience of reference only, and in no way define or limit any of the provisions hereof or otherwise affect their construction or effect.
SECTION 11.7. This Agreement may be executed in two or more counterparts, each of which is deemed an original but all of which together constitute one and the same instrument.
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SECTION 11.8. If any provision hereof is determined to be invalid, illegal, in conflict with any law or otherwise unenforceable, the remaining provisions hereof will be considered severable and will not be affected thereby, and every remaining provision hereof will remain in full force and effect and will remain enforceable to the fullest extent permitted by applicable law.
SECTION 11.9. This Agreement may not be assigned by either party hereto without the prior written consent of the other party.
SECTION 11.10. Neither the execution nor performance hereof will be deemed to create a partnership or joint venture by and between the Custodian and the Company.
SECTION 11.11. Except as specifically provided herein, this Agreement does not in any way affect any other agreements entered into among the parties hereto and any actions taken or omitted by any party hereunder will not affect any rights or obligations of the other parties hereunder.
SECTION 11.12. The Custodians liability for any transaction initiated by the Custodian or by DST as agent for Company or by the Company shall be limited in accordance with the Master Agreement.
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SIGNATURE PAGE
IN WITNESS WHEREOF, each of the parties has caused this Agreement to be executed in its name and behalf by its duly authorized representative under seal as of the date first above written.
OAKTREE STRATEGIC CREDIT FUND | ||
Name: | ||
Title: | ||
Date: |
UMB BANK, N.A. | ||
Name: | ||
Title: | ||
Date: |
Oaktree Strategic Credit Fund Custody Agreement - Page 10
Exhibit (k)(1)
AMENDED AND RESTATED ADMINISTRATION AGREEMENT
BETWEEN
OAKTREE STRATEGIC CREDIT FUND
AND
OAKTREE FUND ADMINISTRATION, LLC
This Amended and Restated Administration Agreement (Agreement) is made as of April 20, 2022 (the Effective Date) by and between Oaktree Strategic Credit Fund, a Delaware statutory trust (the Company), and Oaktree Fund Administration, LLC, a Delaware limited liability company (the Administrator), amending and restating, in its entirety, the Administration Agreement, made as of February 3, 2022, between the Company and the Administrator.
WHEREAS, the Company is a closed-end management investment company that has elected to be regulated as a business development company (BDC) under the Investment Company Act of 1940, as amended (the Investment Company Act);
WHEREAS, effective as of the date first set forth above, the Company desires to retain the Administrator to provide administrative services to the Company in the manner and on the terms hereinafter set forth;
WHEREAS, the Administrator is willing to provide administrative services to the Company on the terms and conditions hereafter set forth; and
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company and the Administrator hereby agree as follows:
1. | Duties of the Administrator |
(a) Retention of Administrator. The Company hereby retains the Administrator to act as administrator of the Company, and to furnish, or arrange for others to furnish, the administrative services, personnel and facilities described below, subject to review by and the overall control of the Board of Trustees of the Company (the Board), for the period and on the terms and conditions set forth in this Agreement. The Administrator hereby accepts such retention and agrees during such period to render, or arrange for the rendering of, such services and to assume the obligations herein set forth subject to the reimbursement of costs and expenses provided for below. The Administrator and such others shall for all purposes herein be deemed to be independent contractors and shall, unless otherwise expressly provided or authorized herein, have no authority to act for or represent the Company in any way or otherwise be deemed agents of the Company.
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(b) Services. The Administrator shall perform (or oversee, or arrange for, the performance of) the administrative services necessary for the operation of the Company. Without limiting the generality of the foregoing, the Administrator shall provide the Company with office facilities, equipment and clerical, bookkeeping and record keeping services at such facilities; perform, or oversee the performance of, the Companys required administrative services, which will include, among other things, providing assistance in accounting, legal, compliance, operations, technology and investor relations; and such other services as the Administrator, subject to review by the Board, shall from time to time determine to be necessary or useful to perform its obligations under this Agreement. The Administrator may also, on behalf of the Company and subject to review by the Board, conduct relations and negotiate agreements with custodians, trustees, depositories, transfer agents, dividend disbursing agents, other shareholder servicing agents, accountants, attorneys, underwriters, brokers and dealers, corporate fiduciaries, insurers, banks and such other persons in any such other capacity deemed to be necessary or desirable. The Administrator shall make reports to the Board of its performance of obligations hereunder and furnish advice and recommendations with respect to such other aspects of the business and affairs of the Company, in each case, as it shall determine to be necessary or desirable or as reasonably requested by the Board; provided that nothing herein shall be construed to require the Administrator to, and the Administrator shall not, provide any advice or recommendation relating to the securities and other assets that the Company should purchase, retain or sell or provide any other investment advisory services to the Company. The Administrator shall provide portfolio collections functions for interest income, fees and warrants and be responsible for the financial and other records that the Company is required to maintain under the Investment Company Act and shall prepare, print and disseminate reports to shareholders, and reports and other materials filed with the Securities and Exchange Commission (the SEC). The Administrator will provide, on the Companys behalf, significant managerial assistance to those portfolio companies to which the Company offers and thereafter provides such assistance. In addition, the Administrator will assist the Company in determining and publishing the Companys net asset value and net asset value per share, overseeing the preparation and filing of the Companys tax returns, and generally overseeing the payment of the Companys expenses and the performance of administrative and professional services rendered to the Company by others.
(c) For the avoidance of doubt, the parties agree that the Administrator is authorized, subject to review and prior approval by the Board in the manner set forth in Section 7(b) of this Agreement, to enter into sub-administration agreements as the Administrator determines necessary in order to carry out the services set forth in Section 1(b) of this Agreement.
2. | Records |
The Administrator agrees to maintain and keep all books, accounts and other records of the Company that relate to activities performed by the Administrator hereunder and will maintain and keep such books, accounts and records in accordance with the Investment Company Act. In compliance with the requirements of Rule 31a-3 under the Investment Company Act, the Administrator agrees that all records which it maintains for the Company shall at all times remain the property of the Company, shall be readily accessible during normal business hours, and shall be promptly surrendered upon the termination of the Agreement or otherwise on written request. The Administrator further agrees that all records that it maintains for the Company pursuant to Rule 31a-1 under the Investment Company Act will be preserved for the periods prescribed by Rule 31a-2 under the Investment Company Act unless any such records are earlier surrendered as provided above. Records shall be surrendered in usable machine-readable form. The Administrator shall have the right to retain copies of such records subject to observance of its confidentiality obligations under this Agreement.
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3. | Confidentiality |
The parties hereto agree that each shall treat confidentially the terms and conditions of this Agreement and all information provided by each party to the other regarding its business and operations. All confidential information provided by a party hereto, including nonpublic personal information (regulated pursuant to Regulation S-P of the SEC), shall be used by any other party hereto solely for the purpose of rendering services pursuant to this Agreement and, except as may be required in carrying out this Agreement, shall not be disclosed to any third party, without the prior consent of such providing party. The foregoing shall not be applicable to any information that is publicly available when provided or thereafter becomes publicly available other than through a breach of this Agreement, or that is required to be disclosed by any regulatory or legal authority, or legal counsel of the parties hereto, by judicial or administrative process or otherwise by applicable law or regulation.
4. | Compensation; Allocation of Costs and Expenses |
In full consideration of the provision of the services of the Administrator, the Company shall reimburse the Administrator for the costs and expenses incurred by the Administrator in performing its obligations and providing personnel and facilities hereunder. The Company will bear all costs and expenses incurred in its organization, operation, administration and transactions and not (x) specifically assumed by Oaktree Fund Advisers, LLC (the Adviser), pursuant to that certain Amended and Restated Investment Advisory Agreement, dated as of April 20, 2022 (the Investment Advisory Agreement) or (y) advanced and covered by the Adviser pursuant to that certain Expense Support and Conditional Reimbursement Agreement, dated as of February 3, 2022. Costs and expenses to be borne by the Company include, but are not limited to, those relating to: (a) all costs, fees, expenses and liabilities incurred in connection with the formation and organization of the Company and the offering and sale of the Companys common shares of beneficial interest (Common Shares), including expenses of registering or qualifying securities held by the Company for sale and blue sky filing fees, costs associated with technology integration between the Companys systems and those of participating intermediaries, reasonable bona fide due diligence expenses of participating intermediaries supported by detailed and itemized invoices, costs in connection with preparing sales materials and other marketing expenses, design and website expenses, fees and expenses of the Companys escrow agent and transfer agent, fees to attend retail seminars sponsored by participating intermediaries and costs, expenses and reimbursements for travel, meals, accommodations, entertainment and other similar expenses related to meetings or events with prospective investors, intermediaries, registered investment advisors or financial or other advisors, but excluding the shareholder servicing fee; (b) diligence and monitoring of the Companys financial, regulatory and legal affairs, and, if necessary, enforcing rights in respect of investments (to the extent an investment opportunity is being considered for the Company and any other funds or accounts managed by the Adviser or its affiliates, the Advisers out-of-pocket expenses related to the due diligence for such investment will be shared with such other funds and accounts pro rata based on the anticipated allocation of such investment opportunity between the Company and the other funds and accounts); (c) the cost
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of calculating the Companys net asset value (including the cost of any third-party valuation firms); (d) the cost of effecting sales and repurchases of the Common Shares and other securities; (e) management and incentive fees payable pursuant to the Investment Advisory Agreement; (f) fees and expenses payable under any distribution manager and selected intermediary agreements, if any; (g) costs and expenses of any sub-administration agreements entered into by the Administrator; (h) fees payable to third parties relating to, or associated with, making investments and valuing investments (including third-party valuation firms); (i) retainer, finders, placement, adviser, consultant, custodian, sub-custodian, depository (including a depository appointed pursuant to the AIFM Directive (as defined below) or pursuant to any national private placement regime in any jurisdiction, a Swiss representative and paying agent appointed pursuant to the Swiss representative and paying agent appointed pursuant to the Swiss Collective Investment Schemes Act (as amended) and the implementation thereof), transfer agent, trustee, disbursal, brokerage, registration, legal and other similar fees, commissions and expenses attributable to making or holding investments; (j) the reporting, filing and other compliance requirements (including expenses associated with the initial registrations, filings and compliance) contemplated by the AIFM Directive or any national private placement regime in any jurisdiction (including any reporting required in connection with Annex IV of the AIFM Directive); (k) fees and expenses associated with marketing efforts (including travel and attendance at investment conferences and similar events); (l) allocable out-of-pocket costs incurred in providing managerial assistance to those portfolio companies that request it; (m) fees, interest and other costs payable on or in connection with any indebtedness; (n) federal and state registration fees and other governmental charges; (o) any exchange listing fees; (p) federal, state and local taxes; (p) independent trustees fees and expenses; (q) brokerage commissions; (r) costs of proxy statements, shareholders reports and notices and any other regulatory reporting expenses; (s) costs of preparing government filings, including periodic and current reports with the SEC; (t) fidelity bond, liability insurance and other insurance premiums; (u) printing, mailing, independent accountants and outside legal costs; (v) costs of winding up and liquidation; (w) litigation, indemnification and other extraordinary or non-recurring expenses; (x) dues, fees and charges of any trade association of which the Company is a member; (y) research and software expenses, quotation equipment and services and other expenses incurred in connection with data services, including subscription costs, providing real-time price feeds, real-time news feeds, securities and company information, and company fundamental data attributable to such investments; (z) costs and expenses relating to investor reporting and communications; (aa) costs of preparing financial statements and maintaining books and records, costs of Sarbanes-Oxley Act of 2002 compliance and attestation and costs of preparing and filing reports or other documents with the SEC, Financial Industry Regulatory Authority, the Commodity Futures Trading Commission and other regulatory bodies and other reporting and compliance costs, including registration and exchange listing and the costs associated with reporting and compliance obligations under the Investment Company Act and any other applicable federal and state securities laws, and the compensation of professionals responsible for the foregoing; (bb) all other out-of-pocket expenses, fees and liabilities that are incurred by the Company or by the Adviser on behalf of the Company or that arise out of the operation and activities of the Company, including expenses related to organizing and maintaining persons through or in which investments may be made and the allocable portion of any Adviser costs, including personnel, incurred in connection therewith; (cc) accounting expenses, including expenses associated with the preparation of the financial statements and tax information reporting returns of the Company and the filing of various tax withholding forms and treaty forms by the Company; (cc) the allocable portion of the compensation of the Companys Chief Financial Officer and Chief Compliance
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Officer and their respective staffs; and (dd) all other expenses incurred by the Administrator, an affiliate of the Administrator or the Company in connection with administering the Companys business, including payments under this Agreement to the Administrator or such affiliate in an amount equal to the Companys allocable portion of overhead and other expenses incurred by the Administrator or such affiliate in performing its obligations and services under this Agreement, such as rent and the Companys allocable portion of the cost of personnel attributable to performing such obligations and services, including, but not limited to, marketing, legal and other services performed by the Administrator or such affiliate for the Company. For the avoidance of doubt, the Company will bear its allocable portion of the costs of the compensation, benefits, and related administrative expenses (including travel expenses) of the Companys officers who provide operational and administrative services hereunder, their respective staffs and other professionals who provide services to the Company (including, in each case, employees of the Administrator or an affiliate) who assist with the preparation, coordination, and administration of the foregoing or provide other back office or middle office financial or operational services to the Company. Notwithstanding anything to the contrary contained herein, the Company shall reimburse the Administrator (or its affiliates) for an allocable portion of the compensation paid by the Administrator (or its affiliates) to such individuals (based on a percentage of time such individuals devote, on an estimated basis, to the business and affairs of the Company and in acting on behalf of the Company).
From time to time, the Administrator or its affiliates may pay third-party providers of goods or services. The Company will reimburse the Administrator or such affiliates thereof for any such amounts paid on the Companys behalf.
AIFM Directive means Directive 2011/61/EU of the European Parliament and of the Council dated 8 June 2011 on Alternative Investment Fund Managers, together with Commission Delegated Regulation (EU) No 231/2013 supplementing Directive 2011/61/EU, as well as any similar or supplementary law, rule or regulation including any equivalent or similar law, rule or regulation implemented in the United Kingdom as a result of its withdrawal from the European Union, or subordinate legislation thereto, as implemented in any relevant jurisdiction.
The reimbursement by the Company of costs and expenses incurred by the Administrator in performing its obligations and providing personnel and facilities hereunder shall be an amount equal to the lower of the Administrators actual cost or the amount the Company would be required to pay third parties for the provision of comparable administrative services in the same geographic location, and such costs shall be reasonably allocated to the Company on the basis of assets, revenues, time records or other method conforming with GAAP. Except as otherwise provided in this Agreement or in the Companys declaration of trust (the Declaration of Trust), no reimbursement shall be permitted for services for which the Administrator is entitled to compensation by way of a separate fee.
5. | Limitation of Liability of the Administrator; Indemnification |
(a) The Administrator (and its officers, managers, partners, agents, employees, controlling persons, members, and any other person or entity affiliated with the Administrator, including without limitation its members, the Adviser and any person affiliated with its members or the Adviser to the extent they are providing services for or otherwise acting on behalf of the
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Administrator, the Adviser or the Company) (collectively, the Indemnified Parties) shall not be liable to the Company for any action taken or omitted to be taken by the Administrator, including any mistake of fact or error in judgment taken, suffered or made by such Indemnified Party, in connection with the performance of any of its duties or obligations under this Agreement or otherwise as administrator for the Company, and the Company shall indemnify, defend and protect the Indemnified Parties and hold each of them harmless from and against all damages, liabilities, fees, penalties, costs and expenses (including reasonable attorneys fees and amounts reasonably paid in settlement) incurred by the Indemnified Parties in or by reason of any pending, threatened or completed action, suit, investigation or other proceeding (including an action or suit by or in the right of the Company or its security holders) (each, a Proceeding) arising out of or otherwise based upon the performance of any of the Administrators duties or obligations under this Agreement or otherwise as administrator for the Company, except to the extent that such claims are among employees of the Administrator or any of its affiliates (collectively, Oaktree) or brought against Oaktree by employees of Oaktree, in each case solely relating to or arising out of the internal affairs of Oaktree.
(b) An Indemnified Party shall incur no liability to the Company in acting in good faith upon any signature or writing believed by such Indemnified Party to be genuine, may rely in good faith on a certificate signed by an executive officer of any person in order to ascertain any fact with respect to such person or within such persons knowledge, and may rely on an opinion of counsel selected (subject to the third sentence of this paragraph) by such Indemnified Party with respect to legal matters. Each Indemnified Party may act directly or through such Indemnified Partys agents or attorneys. Each Indemnified Party may consult with counsel, appraisers, engineers, accountants and other skilled persons selected and retained by such Indemnified Party and shall not be liable to the Company for anything done, suffered or omitted in good faith in reliance upon the advice of any of such persons. No Indemnified Party shall be liable to the Company for any error of judgment made by an officer or employee of such Indemnified Party otherwise within the scope of authority granted to such Indemnified Party by this Agreement.
(c) For any claims indemnified by the Company under Section 5(a) above to the fullest extent permitted by law, the Company shall promptly pay expenses (including legal fees and expenses) incurred by any Indemnified Party in appearing at, participating in or defending any action, suit, claim, demand or proceeding in advance of the final disposition of such action, suit, claim, demand or proceeding, including appeals, within 30 days after receipt by the Company of a statement or statements from the Indemnified Party requesting such advance or advances on its behalf (without interest). Each Indemnified Party hereby undertakes to repay any amounts advanced on its behalf (without interest) to the extent that it is ultimately determined that the Indemnified Party is not entitled under this Agreement to be indemnified by the Company. Such undertaking shall be unsecured and accepted without reference to the financial ability of the Indemnified Parties to make repayment and without regard to the Indemnified Parties ultimate entitlement to indemnification under the provisions of this Agreement. No other form of undertaking shall be required of the Indemnified Parties other than the execution of this Agreement.
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(d) Promptly after receipt by an Indemnified Party of notice of the commencement of any Proceeding, such Indemnified Party shall, if a claim for indemnification in respect thereof is to be made against the Company, give written notice to the Company of the commencement of such Proceeding; provided that the failure of any Indemnified Party to give such notice as provided herein shall not relieve the Company of its obligations under this Paragraph 5 except to the extent that the Company is actually prejudiced by such failure to give such notice. If any such Proceeding is brought against an Indemnified Party (other than a derivative suit in right of the Company), the Company will be entitled to participate in and to assume the defense thereof to the extent that the Company may wish, with counsel reasonably satisfactory to such Indemnified Party. After notice from the Company to such Indemnified Party of the Companys election to assume the defense of such Proceeding, the Company will not be liable for expenses subsequently incurred by such Indemnified Party in connection with the defense thereof. The Company will not consent to entry of any judgment or enter into any settlement of such Proceeding that does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified Party of a release from all liability in respect to such Proceeding and the related claim.
(e) Notwithstanding the above provisions of this Section 5 of this Agreement, nothing contained herein shall protect or be deemed to protect the Indemnified Parties against or entitle or be deemed to entitle the Indemnified Parties to indemnification in respect of, any liability to the Company or its security holders to which the Indemnified Parties would otherwise be subject by reason of willful misfeasance, bad faith or gross negligence in the performance of the Administrators duties or by reason of the reckless disregard of the Administrators duties and obligations under this Agreement (to the extent applicable, as the same shall be determined in accordance with the Investment Company Act and any interpretations or guidance by the SEC or its staff thereunder).
(f) The provisions of this Section 5 shall continue to afford protection to each Indemnified Party regardless of whether such Indemnified Party remains in the position or capacity pursuant to which such Indemnified Party became entitled to indemnification under this Section 5 and regardless of any subsequent amendment to this Agreement, and no amendment to this Agreement shall reduce or restrict the extent to which these indemnification provisions apply to actions taken or omissions made prior to the date of such amendment.
(g) The right of any Indemnified Party to the indemnification provided herein shall be cumulative with, and in addition to, any and all rights to which such Indemnified Party may otherwise be entitled by contract or as a matter of law or equity and shall extend to such Indemnified Partys successors, assigns, heirs and legal representatives.
(h) Notwithstanding the above provisions of this Section 5 of this Agreement to the contrary, the Company shall not provide for indemnification of an Indemnified Party for any liability or loss suffered by an Indemnified Party, nor shall the Company provide that any of the Indemnified Parties be held harmless for any loss or liability suffered by the Company, unless all of the following conditions are met: (i) the Company has determined, in good faith, that the course of conduct that caused the loss or liability was in the best interests of the Company; (ii) the Company has determined, in good faith, that the Indemnified Party was acting on behalf of or performing services for the Company; (iii) the Company has determined, in good faith, that such liability or loss was not the result of (A) negligence or misconduct, in the case that the Indemnified Party is the Administrator or an Affiliate (as defined in the Declaration of Trust) of the Administrator, or (B) gross negligence or willful misconduct, in the case that the Indemnified Party is a director of the Company who is not also an officer of the Company or the Administrator or an Affiliate of the Administrator; and (iv) such indemnification or agreement to hold harmless is recoverable only out of the Companys net assets and not from the Company shareholders.
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Furthermore, the Indemnified Party shall not be indemnified for any losses, liabilities or expenses arising from or out of an alleged violation of federal or state securities laws by such party unless one or more of the following conditions are met: (A) there has been a successful adjudication on the merits of each count involving alleged material securities law violations as to the Indemnified Party; (B) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnified Party; or (C) a court of competent jurisdiction approves a settlement of the claims against the Indemnified Party and finds that indemnification of the settlement and the related costs should be made, and the court considering the request for indemnification has been advised of the position of the SEC and of the published position of any state securities regulatory authority in which Common Shares were offered or sold as to indemnification for violations of securities laws.
(i) The Company may pay or reimburse reasonable legal expenses and other costs incurred by the Indemnified Party in advance of final disposition of a proceeding only if all of the following are satisfied: (i) the proceeding relates to acts or omissions with respect to the performance of duties or services on behalf of the Company; (ii) the Indemnified Party provides the Company with written affirmation of such Indemnified Partys good faith belief that the Indemnified Party has met the standard of conduct necessary for indemnification by the Company; (iii) the legal proceeding was initiated by a third party who is not a Company shareholder, or, if by a Company shareholder acting in his or her capacity as such, a court of competent jurisdiction approves such advancement; and (iv) the Indemnified Party provides the Company with a written agreement to repay the amount paid or reimbursed by the Company, together with the applicable legal rate of interest thereon, if it is ultimately determined that the Indemnified Party did not comply with the requisite standard of conduct and is not entitled to indemnification.
6. | Activities of the Administrator |
The services of the Administrator to the Company are not to be deemed to be exclusive, and the Administrator and each of its affiliates is free to render services to others. It is understood that trustees, officers, employees and shareholders of the Company are or may become interested in the Administrator and its affiliates, as directors, officers, members, managers, employees, partners, stockholders or otherwise, and that the Administrator and directors, officers, members, managers, employees, partners and stockholders of the Administrator and its affiliates are or may become similarly interested in the Company as shareholders or otherwise.
7. | Duration and Termination of this Agreement |
(a) This Agreement shall become effective as of the Effective Date. This Agreement may be terminated at any time, without the payment of any penalty, upon 60 days written notice, by the vote of a majority of the outstanding voting securities of the Company, or by the vote of the Companys trustees or by the Administrator.
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(b) This Agreement shall remain in effect for two years from the Effective Date, and thereafter shall continue automatically for successive annual periods, provided that such continuance is specifically approved at least annually by (a) the vote of the Board, or by the vote of a majority of the outstanding voting securities of the Company and (b) the vote of a majority of the Companys trustees who are not parties to this Agreement or interested persons (as such term is defined in Section 2(a)(19) of the Investment Company Act) of any such party, in accordance with the requirements of the Investment Company Act and each of whom is an independent trustee under applicable securities exchange listing standards. Notwithstanding any termination or expiration of this Agreement, the Administrator will be entitled to any amounts owed through the date of termination or expiration.
(c) This Agreement may not be assigned by a party without the consent of the other party; provided, however, that the rights and obligations of the Company under this Agreement shall not be deemed to be assigned to a newly-formed entity in the event of the merger of the Company into, or conveyance of all of the assets of the Company to, such newly- formed entity; provided, further, however, that the sole purpose of that merger or conveyance is to effect a mere change in the Companys legal form into another limited liability entity. The provisions of Section 5 of this Agreement shall remain in full force and effect, and the Administrator shall remain entitled to the benefits thereof, notwithstanding any termination of this Agreement.
8. | Amendments of this Agreement |
This Agreement may be amended pursuant to a written instrument by mutual consent of the parties.
9. | Governing Law |
This Agreement shall be construed in accordance with the laws of the State of New York and shall be construed in accordance with the applicable provisions of the Investment Company Act. To the extent the applicable laws of the State of New York, or any of the provisions herein, conflict with the provisions of the Investment Company Act, the latter shall control.
10. | Entire Agreement |
This Agreement contains the entire agreement of the parties and supersedes all prior agreements, understandings and arrangements with respect to the subject matter hereof.
11. | Notices |
Any notice under this Agreement shall be given in writing, addressed and delivered or mailed, postage prepaid, to the other party at its principal office.
12. | No Third Party Beneficiary |
Other than expressly provided for in Paragraph 5 of this Agreement, this Agreement does not and is not intended to confer any rights or remedies upon any person other than the parties to this Agreement; there are no third-party beneficiaries of this Agreement, including but not limited to shareholders of the Company.
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13. | Severability |
Every term and provision of this Agreement is intended to be severable. If any term or provision hereof is illegal or invalid for any reason whatsoever, such term or provision will be enforced to the maximum extent permitted by law and, in any event, such illegality or invalidity shall not affect the validity of the remainder of this Agreement.
14. | Counterparts |
This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which taken together shall constitute a single agreement.
15. | Survival of Certain Provisions |
The provisions of Paragraph 5 of this Agreement shall survive any termination or expiration of this Agreement and the dissolution, termination and winding up of the Company.
[Remainder of Page Intentionally Left Blank]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered this Agreement as of the date first above written.
OAKTREE STRATEGIC CREDIT FUND | ||
By: | /s/ Mary Gallegly | |
Name: Mary Gallegly | ||
Title: General Counsel and Secretary | ||
OAKTREE FUND ADMINISTRATION, LLC | ||
By: Oaktree Capital Management, L.P. | ||
Its: Managing Member | ||
By: | /s/ Mary Gallegly | |
Name: Mary Gallegly | ||
Title: Managing Director | ||
By: | /s/ Matthew Stewart | |
Name: Matthew Stewart | ||
Title: Senior Vice President |
[Signature Page to Oaktree Strategic Credit Fund A&R Administration Agreement]